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FOR IMMEDIATE RELEASE
LONDON - SEPTEMBER 06, 2017 09:23 AM (EDT)
A.M. Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” from “a+” and affirmed the Financial Strength Rating of A (Excellent) of Sompo Japan Canopius Reinsurance AG (SJC Re) (Switzerland). These Credit Ratings (ratings) remain under review with implications revised to negative from developing.
The rating actions follow the announcement on 1 September 2017, by Sompo Canopius AG, an intermediate parent company of SJC Re, that it is to be acquired by a private equity consortium led by Centerbridge Partners LP.
Historically, SJC Re’s ratings have benefited from rating enhancement due to the company’s strategic importance to its current ultimate parent, Sompo Japan Nipponkoa Insurance Inc. (SJNKI), and the existence of an explicit guarantee between SJC Re and SJNKI. The Long-Term ICR downgrade reflects A.M. Best’s view that SJC Re is no longer strategically important to SJNKI.
The ratings maintain an under review status, with implications revised to negative because A.M. Best will need to assess the impact of the changes in ownership on the financial strength of SJC Re following the completion of the transaction. The explicit guarantee from SJNKI will cover the run-off of all insurance business written by SJC Re before its acquisition. The resolution of the under review with negative implications status will follow A.M. Best’s analysis of SJC Re’s new business plans, along with an assessment of the financial strength of Sompo Canopius AG under its new ownership.
SJC Re was incorporated in Switzerland on 23 November 2015, following the redomiciliation of Canopius Reinsurance Limited from Bermuda. The company underwrites third-party reinsurance business through a network of branches in Switzerland and Bermuda. Property/casualty reinsurance contributed the majority of the company’s reported gross premium revenue in 2016.
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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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