Best’s News & Research Service - March 30, 2022 01:44 PM (EDT)
AM Best Affirms Credit Ratings of Eureka-Re SCC
- March 30, 2022 01:44 PM (EDT)
Mexico City //BestWire// - AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Eureka-Re SCC (Eureka) (Barbados). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Eureka’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The stable outlooks reflect AM Best’s expectation that Eureka’s business strategy will lead to more-stable financial performance in upcoming years; in particular, the company’s operating performance.
Eureka, established in Barbados in 2009, is a Latin American regional reinsurer. The company underwrites mostly lower layers of facultative programs, originated through managing general agents. While most of premium taken by the company is sourced from Latin America, the company has diversified internationally, underwriting almost half of its business outside the region. Eureka’s business profile is assessed as neutral, recognizing the company’s evolving geographical diversification and its capacity to take risks; AM Best will continue to monitor the company’ performance in newer territories and assumed risks.
AM Best assesses Eureka’s balance sheet strength at the strongest level, as the availability and quality of its capital are well-positioned against the company’s risk profile. The company is subject to catastrophe-related losses, and as a result, has adjusted its retentions according to its experience, with a high quality panel of reinsurers. Investments are set to match insurance obligations, with a proprietary portfolio aimed to achieve yield and develop business opportunities, AM Best will continue to monitor those investments and its impact on the risk-adjusted capitalization of the company.
AM Best assesses Eureka’s operating performance as adequate, as the company sustained profitable performance in 2021 through its technical capacities, supported by its investment income. Such results reflect the continuous adjustments in underwriting and retentions that adapt to the evolving business landscape. AM Best will remain vigilant in monitoring the company’s performance and continued implementation of its strategy in 2022, as economic activity continues to recover in the region.
Negative rating actions could take place if volatility in Eureka’s operating performance affects the bottom-line results of the company, and ultimately, its risk-adjusted capitalization. Negative rating actions also could occur if the equity focused investment strategy pressures risk-adjusted capitalization of the company to levels not supportive of the current 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 July 22, 2021)
- 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: Feb. 24, 2021
- Date Range of Financial Data Used: Dec. 31, 2016-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.
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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.