Best’s News & Research Service - March 26, 2026 01:53 PM (EDT)
AM Best Upgrades Credit Ratings of Black Gold Re Limited
- March 26, 2026 01:53 PM (EDT)
//BestWire// - AM Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” (Excellent) from “bbb+” (Good) of Black Gold Re Limited (BGRe) (Bermuda). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect BGRe’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 (ERM).
The upgrading of these ratings also reflects BGRe’s consistently robust balance sheet fundamentals, supported by strong internal capital generation and a sustained trend of risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). This position is supported by a comfortable buffer and is expected to be sustained over the medium term. The company’s balance sheet strength is further reinforced by efficient capital management practices, a conservative asset-liability management (ALM) framework and low underwriting leverage.
BGRe made an initial dividend payment in 2025 to its parent company and anticipates uture distributions. However, they are expected to be aligned with the BGRe’s capital management approach and not to materially weaken the company’s balance sheet strength.
BGRe is a captive reinsurer of Ecopetrol S.A. (Ecopetrol) [NYSE: EC], a Colombia-based integrated energy company that is 88.5% owned by Colombia’s government. The ratings also recognize the importance of the company within Ecopetrol’s strategy. Through a dual insurance program structure, BGRe provides reinsurance to the Ecopetrol group, focusing on specialized property/casualty lines while maintaining a prudent risk retention profile.
The company continues to demonstrate a solid track record of profitable underwriting performance, as evidenced by sustained low combined ratios (on a net/net, IFRS 17 basis). BGRe’s performance reflects disciplined loss ratio management, underpinned by a robust retrocession program, effective expense management and stable ceding commission income. AM Best expects BGRe to maintain premium sufficiency, supported by disciplined underwriting.
AM Best views the company’s business profile as neutral. BGRe benefits from access to a wide scope of insured risks, reflecting Ecopetrol’s relevance within the oil and gas industry in the Americas. Nonetheless, the company’s portfolio is concentrated in Colombia.
AM Best considers BGRe’s ERM to be appropriate as it is well-integrated within Ecopetrol and is important to the group as a cost-effective risk management tool.
Negative rating actions could arise following a material deterioration in liquidity and leverage metrics, adverse changes in the ALM profile, or a weakening of its risk-adjusted capitalization as result of large losses and/or capital outflows. Negative rating pressure could arise if the credit profile of the parent company, Ecopetrol, weakens. Although unlikely in the medium term, positive rating actions could result from a sustained improvement in the operating performance of BGRe.
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:
- Rating Captives and Other Alternative Risk Transfer Entities (Version Aug. 28, 2025)
- Evaluating Country Risk (Version June 6, 2024)
- Understanding Global BCAR (Version Sept. 18, 2025)
- Catastrophe Analysis in AM Best Ratings (Version Feb. 27, 2026)
- Available Capital and Insurance Holding Company Analysis (Version Aug. 18, 2025)
- Scoring and Assessing Innovation (Version Feb. 20, 2025)
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: March 27, 2025
- Initial Rating Date: Feb. 8, 2022
- Date Range of Financial Data Used: Dec. 31, 2020-Dec. 31, 2025
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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