AM Best Upgrades Somerset Re Credit Ratings
AM Best has upgraded the Financial Strength Rating to A- [Excellent] from B++ [Good] and the Long-Term Issuer Credit Rating to “a-” from “bbb+” of Bermuda-based Somerset Reinsurance Ltd. The outlook of these Credit Ratings has been revised to stable from positive.
A statement from the ratings agency said, “The ratings reflect Somerset Re’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management [ERM].
“Somerset Re is a life and annuity reinsurer registered in Bermuda. The company is focused on providing reinsurance solutions for asset-intensive life insurance and annuity business, including programs for new business flow and management of legacy blocks of life insurance and annuities.
“The rating upgrades reflect the company’s ability to execute on its business plan, including positive core earnings trends in profitability and premium growth.
“The balance sheet strength is assessed on Somerset Re’s five-year business plan with a very high level of capital injected into the business at startup by the parent company. The shareholders initially provided $400 million of capital and will potentially infuse more as necessary. AM Best anticipates the current capitalization level to support new business growth over the intermediate term without the need to access additional funding.
“The company is backed by a very experienced reinsurance management team with deep ties to the industry. The company’s ERM program is well-developed and currently appropriate for its business operations.“
