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Best’s News & Research Service - October 02, 2020 03:03 PM (EDT)

AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of Ocean Intl. Reinsurance Co. Ltd.

  • October 02, 2020 03:03 PM (EDT)
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Mexico City //BestWire// - AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Ocean International Reinsurance Company Limited (Ocean Re) (Barbados). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Ocean Re’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

In February 2020, AM Best placed Ocean Re’s ratings under review with developing implications to reassess the company’s financial strength, corporate structure and strategy following completion of the acquisition of a major share of the company by QD Overseas Ventures Inc. (QDOV, previously named Energy Risk Indemnity Reinsurance Inc.). Since then, Ocean Re has provided needed information, including consolidated audited financial statements, and shown progress in the alignment of its corporate structure and implementation of its strategy, relieving AM Best’s concerns.

The stable outlooks derive from the reinforced capital base of the company after its acquisition, which provides the company the capacity to expand into new markets and products. The stable outlooks also recognize disciplined underwriting by the company and profitable results amid an unfavorable business cycle.

Ocean Re is a Barbados-based reinsurer, licensed as a Class 2 insurance company, which offers a diversified product mix throughout Latin America and other strategically identified geographic markets. The company also offers facultative programs that are fully funded to the projected ultimate losses of the company’s clients. Its business development strategy clearly identifies an increase in the proportion of traditional reinsurance in its portfolio, as compared with its captive portfolio.

Ocean Re’s regional geographic footprint continues to expand, reaching into 83 countries throughout Latin America and other countries beyond the region. Ocean Re foresees significant growth potential in Panama, Colombia and Mexico, as well as Guatemala, Argentina, Ecuador, Paraguay, Peru and other countries in the Middle East and North Africa, Inter-African Conference on Insurance Markets (CIMA), and Far East, which would diversify the portfolio.

The company’s risk-adjusted capitalization remains at strongest levels and has benefited from a capital contribution received in early 2020. AM Best will continue to monitor Ocean Re’s balance sheet strength, particularly given the influence that its holding company exerts on it due to its financial leverage and evolving corporate structure.

Ocean Re’s operating performance in 2019 resulted in positive net income, due to good levels of premium sufficiency derived from the nature of its captive business, as well as from an adequate retrocession program for its expanding traditional reinsurance lines. So far, 2020 is proving to be a challenging year for business generation; nevertheless, underwriting performance continues to drive the company’s strategy, either through higher risk-taking or through improved underwriting standards for new captive business.

Negative rating actions could derive from material changes to risk-adjusted capitalization as a result of significant losses or if Ocean Re fails to implement its business strategy successfully. Positive rating actions are not foreseen in the medium term.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit

The methodology used in determining these ratings is Best’s Credit Rating Methodology, 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

Key insurance criteria reports utilized:

  • Alternative Risk Transfer (ART) (Version Oct. 13, 2017)

  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Universal BCAR (Version June 11, 2020)

  • Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017)

  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

  • Scoring and Assessing Innovation (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. 28, 2020

  • Date Range of Financial Data Used: Dec. 31, 2015-July 31, 2020

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.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

Barbados Reinsurers Financial Strength Latin America Press Release Captive Insurers Insurance Caribbean Issuer Credit Rating Best's Credit Rating Action

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