Best’s News & Research Service - October 17, 2018 02:14 PM (EDT)
A.M. Best Affirms Credit Ratings of Marble Reinsurance Corporation
- October 17, 2018 02:14 PM (EDT)
Hong Kong //BestWire// - A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Marble Reinsurance Corporation (Marble Re) (Micronesia). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Marble Re’s balance sheet strength, which A.M. Best categorizes as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
Marble Re’s strong balance sheet assessment mainly reflects its modest capital size, low underwriting leverage and conservative investment portfolio. Given the volume of risks that the company writes and retains, the capital required to support its current book of business is relatively modest.
Marble Re’s underwriting results over the most-recent five-year period have been consistently positive, contributing to an average combined ratio of under 60%. The volatility of the key operating metrics also has been relatively stable, owing largely to a conservative reinsurance program that helped reduce the volatility in its underwriting results.
Marble Re is a wholly owned subsidiary of Marubeni Corporation (Marubeni), which is one of the largest trading companies in Japan. In its role as a single-parent captive, the company only insures and reinsures the risks of affiliated and related companies within the Marubeni group. The types of business written expose the company’s performance to high-severity, low-frequency losses. Nevertheless, Marble Re has managed this risk through a prudent underwriting guideline and a robust reinsurance program with conservative retention levels and limits, including the presence of stop-loss covers for each line of business.
The stable outlooks reflect A.M. Best’s expectation that Marble Re’s operating performance will remain at a strong level, underpinned mainly by favorable claims experience and an expense ratio that should remain stable over time.
Negative rating actions could occur if there is a material increase in risk appetite, which could potentially undermine Marble Re’s profitability and capitalization. Additionally, negative rating actions could occur if there is significant deterioration in Marubeni’s credit profile.
A.M. 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.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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