AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Reaseguradora América SPC Ltd. (RAM Re) (Cayman Islands). The outlook of these Credit Ratings (ratings) is stable.
RAM Re is a subsidiary of ASSA Compañía Tenedora, S.A. and owned ultimately by Grupo ASSA, S.A., a financial services holding company publicly traded on the Panama Stock Exchange.
The ratings reflect RAM Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
RAM Re is registered as a segregated portfolio company, licensed as a Class B(iii) insurer under the Cayman Islands’ insurance law, which allows large clients to place proprietary risks through underlying cells. AM Best recognizes the strategic role that RAM Re aims to achieve in the group’s overall regional strategy; however, RAM Re’s business profile is considered limited given its accessibility to markets when compared with other commercial reinsurers.
The ratings also reflect RAM Re’s very strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), sound operating performance and its affiliation to Grupo ASSA, S.A., which provides synergies and operating efficiencies, as well as parental support and an appropriate ERM framework.
AM Best expects RAM Re to maintain risk-adjusted capitalization levels supportive of its ratings amid material changes in its business profile, driven by ongoing developments in its segregated portfolio cells.
Concerns regarding business volume growth and new portfolio integration, which historically have pressured the company´s capital base, continue to be offset through the successful implementation of RAM Re’s strategy, which is reflected in consistent profitability and underpinned by three segregated portfolio cells.
Factors that could lead to positive rating actions include sustained improvements in RAM Re’s capital base while maintaining risk-adjusted capitalization at a very strong level, supported by the successful materialization of developments concerning RAM Re’s business profile, including its strategy driven by the integration of a new segregated portfolio cells. A deterioration in risk-adjusted capitalization levels, driven by an unsuccessful materialization of developments concerning RAM Re’s business profile, including the failed adoption of its strategy attempting the integration of a new segregated portfolio cells, along with diminished parent commitment, could lead to negative rating actions.
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