AM Best Affirms Credit Ratings of Continental Reinsurance Plc
AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of
The ratings reflect CRe’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile, and marginal enterprise risk management (ERM).
CRe’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). While the company benefits from a relatively conservative investment strategy by asset class, invested assets are somewhat concentrated in
CRe’s adequate operating performance assessment reflects its modest overall profitability and volatile underwriting performance, as demonstrated by its five-year (2018-2022) weighted average combined ratio of 99.1%, which ranged between 95.4% and 105.9% over this period. There is a positive trend in underwriting performance in recent years as the company has benefitted from economies of scale, evidenced by a gradual decline in its expense ratio from a high of 65.2% in 2016 to 43.8% in 2022. Overall earnings have been consistently positive, as demonstrated by a five-year (2018-2022) weighted average return-on-equity of 11.9%, albeit fairly modest when factoring in high inflation and high interest rates across CRe’s key operating markets. AM Best expects underwriting performance in 2023 and prospectively to trend in line with recent years, with overall earnings bolstered by significant FX gains through CRe’s strategy to hold large surpluses of
CRe is a composite reinsurer with a diverse presence across more than 50 countries in
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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Source: AM Best
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