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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JANUARY 13, 2014 12:00 AM (EST)
A.M. Best Co. has assigned a financial strength rating of B+ (Good) and an issuer credit rating of “bbb-” to Active Capital Reinsurance, Ltd (AC Re) (Barbados). The outlook assigned to both ratings is stable.
The ratings reflect AC Re’s solid risk-adjusted capitalization, strong underwriting and overall results in recent years and its Latin American market expertise. AC Re is owned by Active Capital Holdings Corp., a privately owned, British Virgin Islands-domiciled holding company.
AC Re has enhanced its capitalization in recent years as a result of favorable underwriting and overall earnings, and it continues to maintain more than adequate risk-adjusted capitalization for its current business profile. With numerous years of service to Latin American clients, the management team at AC Re has developed extensive knowledge of the Latin American markets in which the company operates and continues to maintain effective risk management strategies.
Partially offsetting these positive rating factors are Active Re’s evolving business profile, asset concentration and related quality of capital issues, and its limited financial flexibility as a result of its private ownership structure.
AC Re commenced operations in 2008, mainly providing credit card affinity programs and credit-related reinsurance solutions to financial institutions in Latin America. However, AC Re’s business profile continues to evolve as it now writes a broader portfolio of coverages over a number of property/casualty lines of business.
While the ratings are stable, factors that could contribute to rating enhancement include continued improvement in AC Re’s underwriting performance and overall profitability, reduction of the related party receivable balances and an upgrade in the Barbados country risk tier rating. Factors that may lead to negative rating actions include a sustained decline in AC Re’s underwriting profitability, significant deterioration in its risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR) and a downgrade in the Barbados country risk tier rating.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. 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.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.