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FOR IMMEDIATE RELEASE
HONG KONG - DECEMBER 20, 2017 11:44 AM (EST)
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of NEWGT Reinsurance Company, Ltd. (NEWGT) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect NEWGT’s balance sheet strength, which A.M. Best categorizes as adequate, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. Additionally, A.M. Best recognizes the wide range of support NEWGT receives from its parent company, ITOCHU Corporation (ITOCHU), a major Japanese trading company that engages in a wide range of global business.
NEWGT’s adequate balance sheet is underpinned by its risk-adjusted capitalization being in the strongest category, a high degree of liquidity and a highly rated retrocession panel. NEWGT’s capital requirements, as measured by Best’s Capital Adequacy Ratio (BCAR), continue to be driven by asset risk due to its sizeable investment assets relative to its shareholder funds through a loan-back to the parent.
NEWGT’s profitability has weakened in recent years due to the decrease in premium volume of its marine cargo line which reflects the parent company’s weakening trading volume.
Despite being a single parent captive, A.M. Best assessed NEWGT’s business profile as neutral due to its well-diversified business mix by geography and modest exposure to third-party risks.
Positive rating actions could occur if NEWGT demonstrates sustained improvement in its profitability while maintaining very strong risk-adjusted capitalization.
Negative rating actions could occur if NEWGT’s risk-adjusted capitalization declines significantly, or if there is material deterioration in its operating performance. Also, negative rating actions could arise from a material deterioration in ITOCHU’s credit rating 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.
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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