AM Best Affirms Credit Ratings of Sura Re Ltd.

MEXICO CITY--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Sura Re Ltd. (Sura Re) (Bermuda). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect Sura Re’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

Sura Re is the wholly owned start-up captive reinsurer of Suramericana S.A. (Sura), which in turn is 81.13% owned by Grupo de Inversiones Suramericana S.A. The company was established in Bermuda as a Class 3A insurer in December 2015. Its main purpose is to participate in property business underwritten by Sura’s affiliates across Latin America (Argentina, Brazil, Chile, Costa Rica, El Salvador, México, Panamá, Dominican Republic and Uruguay). AM Best recognizes the strategic role that Sura Re aims to achieve in Sura’s overall regional strategy; however, Sura Re’s business profile is considered limited given its accessibility to markets when compared with other commercial reinsurers.

AM Best categorizes the company’s balance sheet strength as very strong, as risk-adjusted capitalization is more than adequate for the risks it holds. Its capital base was further strengthen by a USD 10 million capital contribution during 2018; no dividend payments are expected in the medium term. Asset-liability management follows a very conservative investment policy focused on maintaining liquidity to cover its obligations in terms of tenure and currencies. Additionally, ERM is considered appropriate as it is completely supported by Sura’s expertise and management team.

As of December 2018, operating performance still reflects a strong dependence on investment income to cover administrative expenses. As the strategy of the company continues to evolve, AM Best expects technical income to be able to cover these expenses and produce positive net income. When compared with other start-ups and commercial reinsurers, the captive nature of the company guarantees it a portion of well-underwritten risks by its affiliated companies. This provides flexibility in terms of growth and premium risk to efficiently manage its capital and return positions in the future. AM Best therefore considers operating performance to be adequate for the current ratings.

Positive rating actions could take place in the medium term if Sura Re is able to achieve its targeted geographic premium distribution with good quality underwriting coupled with a very strong balance sheet assessment. Negative rating actions could take place if the company’s financial performance falls to a level that affects capital and therefore its risk-adjusted capitalization.

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 www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. 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 rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190424005940/en/

Elí Sánchez
Associate Director
+52 55 1102 2720, ext. 108
[email protected]

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
[email protected]

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
[email protected]

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
[email protected]

Source: AM Best

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