AM Best downgrades Citadel Reinsurance Company
AM Best has downgraded the Financial Strength Rating (FSR) to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “a-” of Bermuda-based Citadel Reinsurance Company.
The outlook of these Credit Ratings (ratings) has been revised to stable from negative.
The downgrade of Citadel Re reflects a declining trend in risk-adjusted capitalization coupled with continuing marginal operating performance as adverse loss and loss adjusted expense reserve development has prevented a material accumulation of surplus over the most recent five-year period, the agency said. However, AM Best noted that company projections indicate reserve stabilization for the six-month period ended June 30, 2018, and into near-term periods. This potentially could become a positive rating factor should the reserve stabilization be accompanied by growth in risk-adjusted capitalization. AM Best also noted that the company recorded a net profit in 2017.
Citadel Re writes reinsurance programmes in a number of areas including prospective and niche, captives, legacy and exit solutions as well as fronting.
