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FOR IMMEDIATE RELEASE
LONDON - NOVEMBER 25, 2015 11:48 AM (EST)
A.M. Best has assigned a financial strength rating of A (Excellent) and an issuer credit rating of “a+” to Sompo Japan Canopius Reinsurance AG (Switzerland), a wholly owned subsidiary of Canopius Group AG (Canopius). The ultimate parent is Sompo Japan Nipponkoa Insurance Inc. (SJNKI). The outlook assigned to both ratings is stable.
The ratings of Sompo Japan Canopius Reinsurance AG reflect its supportive risk-adjusted capitalisation and the expectation of good operating results. The company’s risk management and business profile benefit from its close integration with the specialty (re)insurance operations of Canopius. In addition, the ratings reflect Sompo Japan Canopius Reinsurance AG’s strategic importance to SJNKI as its specialist global reinsurance platform outside of Lloyd’s, as well as an unconditional liability guarantee provided by SJNKI.
An offsetting factor is the company’s exposure to natural catastrophe losses, which is expected to contribute to volatile underwriting performance. This factor is partly mitigated by strong catastrophe risk management within Canopius.
Sompo Japan Canopius Reinsurance AG was incorporated in Switzerland on 23 November 2015 following the redomicile of Canopius Reinsurance Limited from Bermuda. As at 30 June 2015, the company had shareholders’ funds of CHF 484 million. SJNKI is expected to inject approximately CHF 357 million of capital into Sompo Japan Canopius Reinsurance AG over the next four years to support growth.
The company will underwrite third-party reinsurance business through a network of branches in Switzerland, Asia, Bermuda and the United States, with property reinsurance initially representing the majority of premium income. Business generation will benefit from existing relationships and expertise within Canopius and the wider Sompo group. However, strong competition makes this a difficult time to enter the global reinsurance market.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
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