Best’s News & Research Service - August 18, 2016 10:51 AM (EDT)
A.M. Best Affirms Ratings of Trust International Insurance & Reinsurance Company B.S.C. (c) Trust Re
- August 18, 2016 10:51 AM (EDT)
London //BestWire// - A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Trust International Insurance & Reinsurance Company B.S.C. (c) Trust Re (Trust Re) (Bahrain). The outlook for each rating remains stable. Trust Re is ultimately owned by Nest Investments (Holdings) Limited (NEST), an investment holding company operating in the financial services and real estate sectors.
The rating affirmations reflect Trust Re’s strong risk-adjusted capitalisation, track record of solid operating performance and good business profile.
Trust Re actively manages its risks to ensure its capital position remains at a strong level. In 2015, Trust Re’s risk-adjusted capitalisation was further strengthened by a capital injection of USD 30 million and the full retention of earnings, which increased shareholders’ equity by 11.5% to USD 430 million. A.M. Best anticipates Trust Re’s risk-adjusted capitalisation to remain at a supportive level, as further parental contributions and the generation of earnings are expected to support underwriting growth.
Trust Re has a track record of consistent profitability, with a five-year weighted average return on equity of 6.4%. In 2015, profits improved to USD 30.7 million from USD 15.4 million, chiefly driven by a one-off realised gain associated with the sale of shares. Disciplined risk selection and a prudent reserving policy have enabled Trust Re to maintain robust technical results, evidenced by a five-year average combined ratio of 96.5%. Although investment returns remain relatively low, they continue to account for a significant proportion of overall earnings.
Trust Re has a developing business profile as a specialist underwriter of energy and property reinsurance across the Middle East, Afro-Asian and Eastern European markets, underpinned by its long-standing relationships with key cedants. In addition, the company benefits from its exposure to the Lloyd’s market via its investment in Trust Underwriting Limited (a corporate member at Lloyd’s). The composition of Trust Re’s underwriting portfolio is not expected to change materially in the short term. However, some geographic diversification is anticipated as the company looks to grow in certain Asian and African markets.
This press release relates to rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.
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