AM Best


NOVEMBER 17, 2022 11:50 AM (EST)

AM Best Affirms Credit Ratings of Orion Reinsurance (Bermuda) Ltd.


CONTACTS:
 Olga Rubo, FRM
Senior Financial Analyst
+52 55 1102 2720, ext. 134
olga.rubo@ambest.com

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Al Slavin
Communications Specialist
+1 908 439 2200, ext. 5098
al.slavin@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - NOVEMBER 17, 2022 11:50 AM (EST)
AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Orion Reinsurance (Bermuda) Ltd. (Orion Re) (Hamilton, Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Orion Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings also reflect the company’s strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and the expertise of its management team. Partially offsetting these positive rating factors is the small size of the company, which limits business diversification given the inherent concentration risk.

Orion Re was founded in December 2004 and is licensed by the Bermuda Monetary Authority to act as a class III insurer without restrictions of any kind in its class. Orion Re’s main line of business is difference in conditions insurance, but the company also retains specific life and non-life insurance business. Orion Re has experience and recognition in the public services industry, as well as strategic alliances to support recognized Latin American reinsurers.

As of December 2021, Colombia represented 67% of the company’s gross written premium, with Peru and Mexico generating 14% and 8%, respectively, with the rest distributed in 12 other countries, primarily throughout Latin America and the Caribbean.

Orion Re’s growth has fluctuated over the past five years, which is consistent with the size of the company. Premium sufficiency has yet to be achieved; however, the company has maintained marginally profitable bottom-line results during most years, which are expected to improve as the company’s business expansion plan takes place. The results also are supported by income from the Rent-a-Captive business, which has presented a consistent flow over the past years.

Orion Re’s risk-adjusted capitalization, as measured by BCAR, has shown improvement since 2019, mainly as a result of a more conservative approach in the investment policies, which reduced asset risk. However, due to the company’s size and operation, the scores are sensitive to changes in its balance sheet structure, and the composition of Orion Re’s business portfolio.

AM Best does not expect positive rating actions in the medium term. Negative rating actions could occur if premium growth, changes in the investment and/or underwriting risk profile, or deteriorating operating results reduce risk-adjusted capitalization to a level that no longer supports the ratings.

The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Nov. 13, 2020), which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:


  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Global BCAR (Version June 30, 2022)

  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

  • Scoring and Assessing Innovation (Version March 5, 2020)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Guide to Best’s Credit Ratings.


  • Previous Rating Date: Nov. 18, 2021

  • Date Range of Financial Data Used: Dec. 31, 2015-Dec. 31, 2021

This press release relates to rating(s) that have been published on AM Best’s website. For additional rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.


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AMB# Company Name
076704 Orion Reinsurance (Bermuda) Ltd.