Best’s News & Research Service - December 20, 2023 01:52 PM (EST)
AM Best Assigns Credit Ratings to Sapphire Reinsurance Company
- December 20, 2023 01:52 PM (EST)
Mexico City //BestWire// - AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good) to Sapphire Reinsurance Company (Sapphire) (Cayman Islands). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Sapphire’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
Sapphire is the captive reinsurer associated with a large privately owned Colombian conglomerate with operations in different business sectors across Colombia and Latin America, such as industry, motor, textile, pipe manufacturing, public transport, waste management, among others. The portfolio of the company is concentrated in the motor business line, with most of its business being underwritten in Colombia. Due to its limited commercial scope as a captive, its business profile is considered limited.
Sapphire’s balance sheet strength assessment of strongest reflects its stability and constantly growing capital base, characterized by a responsible asset-liability management and a low underwriting leverage. Sapphire has defined policies and procedures that are attached to its risk tolerance and the company is currently implementing a transformation plan, which will digitalize its operations, rendering AM Best’s ERM assessment as appropriate.
Operating performance is considerate adequate given the company’s positive net income results, sustained by stable and ongoing improvements on its technical ratios.
The stable outlooks on Sapphire’s ratings reflects the expectations that the company will continues to obtain positive operating results, maintaining its balance sheet strength assessment.
Positive rating actions could occur if the company keeps up with its good operating performance results in a sustained way. Conversely, negative rating actions could also take place if Sapphire experiences a deterioration in its risk-adjusted capitalization as a result of weak operating performance and/or capital outflows.
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:
- Understanding Global BCAR (Version July 6, 2023)
- Evaluating Country Risk (Version May 4, 2023)
- Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
- Catastrophe Analysis in AM Best Ratings (Version March 10, 2023)
- Alternative Risk Transfer (Version Oct. 13, 2017)
- Scoring and Assessing Innovation (Version Feb. 27, 2023)
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, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best’s Credit Ratings.
- Previous Rating Date: Not rated.
- Initial Rating Date: Not rated.
- Date Range of Financial Data Used: Dec. 31, 2018-Sept. 30, 2023
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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.