Best’s News & Research Service - February 12, 2026 10:38 AM (EST)
AM Best Affirms Credit Ratings of Himalayan Reinsurance Limited
- February 12, 2026 10:38 AM (EST)
//BestWire// - AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Himalayan Reinsurance Limited (Himalayan Re) (Nepal). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Himalayan Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The company’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is projected to be at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR). Shareholders’ equity increased 10% from NPR 15.3 billion (USD 116 million) in fiscal-year 2024 to approximately NPR 16.5 billion (USD 125 million) in fiscal-year 2025, based on provisional full year financial results, supported by higher paid-up capital. The company has a low-to-moderate risk investment portfolio, with a majority allocation to cash and term deposits, and the remainder mainly in fixed-income securities and public equities. AM Best views Himalayan Re’s exposure to severe earthquake events in Nepal, as well as the inherent modelling risk, as offsetting factors to the balance sheet strength assessment, although the risks are mitigated in part through retrocession.
AM Best views the company’s operating performance as adequate. Himalayan Re has generated positive operating earnings consistently since its formation. In particular, underwriting performance showed an improvement in recent periods, supported in part by a larger business scale and relatively benign loss experience. Prospective underwriting performance will depend heavily on the company’s ability to source good quality domestic business. Investment returns, mainly from interest income, are expected to remain the key driver of earnings over the medium term.
Himalayan Re’s business profile is assessed as limited. Himalayan Re is a domestic reinsurer that was established in the Nepal market in July 2021. The company’s business acquisition approach benefits from mandatory domestic reinsurance cessions approved in 2022, which includes a 6% direct policy cession and a minimum 15% of reinsurance treaty cession in fiscal-year 2025. The company also benefits from a first right of refusal to domestic facultative reinsurance business to domestic reinsurers. AM Best views the regulatory support during the company’s early years to be favourable to its strategic growth objectives as it matures. Notwithstanding an expected decline in the mandatory domestic reinsurance cession ratio over time, AM Best views regulatory support during Himalayan Re’s early years to be favourable to its strategic growth objectives as it matures. Nonetheless, the underwriting portfolio is expected to show a line of business concentration toward property and engineering risks. In addition, Himalayan Re has geographic concentration in Nepal, albeit with gradual diversification planned over time.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings (BCR), Best’s Performance Assessments (PA), Best’s Preliminary Credit Assessments (PCA) 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.