Trust Re receives $130m to shore up future after 2018 credit downgrade

Parent company Nest Investments Holdings (Nest) will pay $130 million replacement funds to Bahrain-based re/insurer Trust International Insurance & Reinsurance Company (Trust Re) this year to shore up the firm’s future after it was hit with a credit downgrade last year.

In October 2018, Trust Re’s credit rating was downgraded by AM Best to B++ (Good) from A- (Excellent) after the reinsurer delayed releasing its audited financial statements. The ratings agency also downgraded its Long-Term Issuer Credit Rating to “bbb+” from “a-”.

Trust Re said that the payment from its parent company Nest was as a result of the impact of regional geo-politics on economic conditions, and the ongoing finalisation of the 2017 and 2018 audited consolidated financial statements of Nest.

The reinsurer added it was “in the process of finalising its new corporate governance framework, which will restore its position of strength and drive it to its fullest potential”.

Talal Al Zain the reinsurer’s group CEO, appointed in April 2019, said: “I would like to thank the Central Bank of Bahrain for their guidance and strong support during this time of extraordinary challenges. Trust Re has experienced the most testing period since its establishment in 1989, and management has dealt with these challenges readily, while maintaining an open dialogue with its clients.”

Al Zain emphasised that Trust Re “has been profitable for the last decade”, while its balance sheet and liquidity position “remain very strong”. He said renewals for financial year 2019 had “been well above budget”.

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