Canopius reinsurance subsidiary gets downgraded following sale

Rating agency AM Best has downgraded Canopius Reinsurance after it reviewed the firm following its  acquisition by Centerbridge Partners.

AM Best has downgraded the FSR to A- (Excellent) from A (Excellent) and the Long-Term ICR to “a-” from “a” of Canopius Reinsurance AG (Canopius Re - previously known as Sompo Japan Canopius Reinsurance, Switzerland).

The rating action follows the March 8, 2018 announcement by Canopius AG (Canopius), the parent company of Canopius Re and Canopius US, that it has been acquired by a private equity consortium led by Centerbridge Partners.

An elevated level of catastrophe risk in recent years has resulted in volatile risk-adjusted capitalisation, AM Best noted. Following the change in ownership, Canopius has lowered its risk appetite and AM Best expects a corresponding reduction in catastrophe exposure. Financial leverage at Canopius’ intermediate parent is considered moderate and has a neutral impact on the group’s balance sheet strength assessment. Furthermore, Canopius’ operates in highly competitive markets.

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