AM Best upgrades Asian Re FSR thanks to reduced balance risk

AM Best has upgraded the financial strength rating of Asian Reinsurance (Thailand) to B+ (Good) from B (Fair). The outlook on the rating has been revised to stable from positive.

The rating firm said the upgrade recognises the reduction in transfer risk associated with a significant portion of Asian Re’s cash and deposit balances.

Following a series of recapitalisation initiatives, Asian Re’s year-end 2015 capital position stood at $63 million, which was above the $55 million level it reached before being hit by catastrophe events in 2011-2012. Since then the company has maintained positive overall results in 2013, 2014 and 2015.

Offsetting rating factors include the soft business environment for reinsurers in which Asian Re is seeking to revive relationships with cedants and rebuild its underwriting portfolio.

Positive rating momentum could result from achieving a trend of stable underwriting results as the company rebuilds its profile and premium base, according to AM Best.

Negative rating action could result from a material deterioration in operating performance or any increase in assets subject to transfer restrictions.

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication, said AM Best.