AM Best Information Services

FEBRUARY 11, 2015 03:03 PM (EST)

A.M. Best Affirms Ratings of Active Capital Reinsurance, Ltd

 Ricardo Longchallon
Senior Financial Analyst
(908) 439-2200, ext. 5676

Peter Dickey
Assistant Vice President
(908) 439-2200, ext. 5053
Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


OLDWICK - FEBRUARY 11, 2015 03:03 PM (EST)
A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of "bbb-" of Active Capital Reinsurance, Ltd (AC Re) (Barbados). The outlook for 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 AC Re management team 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 AC 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 robust underwriting performance and overall profitability and an improvement in the quality of capital as a result of a reduction in the receivable balances from the owners. Factors that may lead to negative rating actions include a sustained decline in underwriting profitability, significant deterioration in risk-adjusted capitalization, as measured by A.M. Best's capital model, and further deterioration in quality of capital resulting from increasing receivable balances from its owners.

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

Key insurance criteria reports utilized:

  • Evaluating Country Risk

  • Insurance Holding Company and Debt Ratings

  • Risk Management and the Rating Process for Insurance Companies

  • Understanding Universal BCAR

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 visit A.M. Best's Ratings & Criteria Center.

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