Best’s News & Research Service - December 10, 2024 01:52 PM (EST)
AM Best Affirms Credit Ratings of Sapphire Reinsurance Company
- December 10, 2024 01:52 PM (EST)
//BestWire// - AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Sapphire Reinsurance Company (Sapphire) (Cayman Islands). The outlook of 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 related to a large privately owned Colombian conglomerate that has operations in different business sectors across Colombia and Latin America, such as the industrial, motor, textile, pipe manufacturing, public transport and waste management sectors. The portfolio of Sapphire is concentrated in the motor business line, with most this being underwritten in Colombia. Due to its limited commercial scope as a captive, Sapphire’s 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.
Sapphire’s operating performance is considerate adequate given its net income, which is sustained by stable and ongoing improvements on its technical ratios.
The stable outlooks on Sapphire’s ratings reflect AM Best’s expectation that the company will continue to obtain positive operating results and maintain its current balance sheet strength assessment level.
Positive rating actions could occur if the company sustains its good operating performance results. Conversely, negative rating actions could result if Sapphire experiences a deterioration in its risk-adjusted capitalization as a result of weak operating performance or capital outflows.
The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Aug. 29, 2024), 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 Aug. 1, 2024)
· Evaluating Country Risk (Version June 6, 2024)
· Available Capital and Insurance Holding Company Analysis (Version Aug. 15, 2024)
· Catastrophe Analysis in AM Best Ratings (Version Feb. 8, 2024)
· Alternative Risk Transfer (ART) (Version Feb. 8, 2024)
· 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: Dec. 20, 2023
· Initial Rating Date: Dec. 20, 2023
· Date Range of Financial Data Used: Dec. 31, 2019-June 30, 2024
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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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.