The rating affirmations reflect Labuan Re’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company maintains low event retention and a
The company’s underwriting leverage has trended downward in recent years, as Labuan Re remediated its underwriting portfolio. The effects of this remediation have been reflected in the company’s operating performance, and underwriting results have improved as well. Most of the remediation has been completed, and the company will seek profitable growth opportunities going forward.
Labuan Re also benefits from having an underwriting portfolio that is geographically diversified. Through its participation in several Lloyd’s syndicates, Labuan Re has been able to gain exposure to risks outside of
An offsetting rating factor is an expense ratio drag, as the company operates on a small scale. Increased competition in some of the Lloyd’s syndicates that Labuan Re participates in also could reduce profitability in this important segment of the company. Additionally, there is some uncertainty regarding the subordinated bond, as its
Positive rating actions are unlikely. Negative rating actions could occur from a material decline in risk-adjusted capitalization or deterioration in Labuan Re’s operating performance.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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Associate Financial Analyst
Chi-Yeung Lok, +65 6589 8400, ext. 211
Senior Financial Analyst
Manager, Public Relations
Director, Public Relations