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FOR IMMEDIATE RELEASE
HONG KONG - FEBRUARY 26, 2015 08:26 AM (EST)
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of NEWGT Reinsurance Company, Ltd. (NEWGT) (Bermuda). The outlook for both ratings is stable.
The ratings reflect NEWGT's robust risk-adjusted capitalization and its profitable operating performance. Also, A.M. Best recognizes the support from its parent company, ITOCHU Corporation (ITOCHU) (Japan).
NEWGT is a single-parent captive of ITOCHU, a major trading company in Japan that engages in a wide range of global businesses. NEWGT's risk-adjusted capitalization remains robust owing to the profitable underwriting results from its major line of ITOCHU-related marine and cargo line and its conservative investment portfolio.
NEWGT has reported profitable operating performance over the past five years, mainly driven by marine cargo business, which is diversified globally due to ITOCHU's broad range of trading activities. Additionally, the ratings recognize NEWGT's strategic importance to ITOCHU, which has provided a wide range of support to NEWGT's operation and capitalization.
Partially offsetting these positive rating factors is NEWGT's expansion into third party business, which could lead to volatility in operating results. This expansion includes the Lloyd's market, which accounts for a significant proportion of its total net premium income in the forecasted periods.
While no positive movement in the ratings is considered in the short term, negative rating action could occur if there is a sharp decline in NEWGT's risk-adjusted capitalization caused by deterioration in its operating performance. In addition, material deterioration in ITOCHU's credit profile could impact NEWGT's ratings as well.
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.
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:
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to rating(s) 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 visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.