Best’s News & Research Service - October 01, 2014 10:16 AM (EDT)
A.M. Best Withdraws Ratings of Risk Reinsurance Limited
Hong Kong //BestWire// - A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating (ICR) to "a+" for Risk Reinsurance Limited (RRL) (Cayman Islands). The outlook for both ratings is stable. RRL is the single parent captive of Transpower New Zealand Limited (Transpower), the state-owned, sole operator of New Zealand's electricity grid. Concurrently, A.M. Best has withdrawn the ratings due to management's request to no longer participate in A.M. Best's interactive rating process.
The affirmations consider RRL's excellent balance sheet strength and capital generation ability, which are supported by Transpower's risk management. Offsetting rating factors include RRL's catastrophe retentions. These are high relative to RRL's capital target and could potentially result in significant volatility in its risk-adjusted capitalization.
The methodology used in determining these interactive 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 www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Risk Management and the Rating Process for Insurance Companies
- Understanding Universal BCAR - A.M. Best's Capital Adequacy Ratio for Insurers
- Catastrophe Analysis in A. M. Best Ratings
- Alternative Risk Transfer (ART)
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
This rating announcement has been issued by A.M. Best Asia-Pacific Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.