A.M. Best Assigns Credit Rating To Somerset Re
A.M. Best has assigned the Financial Strength Rating [FSR] of B++ [Good] and the Long-Term Issuer Credit Rating [Long-Term ICR] of “bbb” to Bermuda-registered Somerset Reinsurance Ltd. The outlook assigned to these Credit Ratings [ratings] is stable.
A statement from the ratings agency said, “Somerset is a life and annuity reinsurer registered in Bermuda. The company is focused on providing underwriting and reinsurance solutions to the life insurance market place while also offering reinsurance capacity to companies in need of reinsurance solutions for in-force asset intensive business. Somerset will provide the life insurance industry with additional counterparty risk alternatives.
“The ratings of Somerset reflect its strong initial capitalization level measured on both absolute terms as well as A.M. Best’s capital model, and is structured based on long-term capital commitments from investors.
“A.M. Best expects that the company’s initial capitalization level will support new business growth over the intermediate term without the need to access additional funding. The strength and experience of Somerset’s management team and the company’s strategic relationship with Hannover Re are also recognized in the ratings.
“Offsetting these strengths of Somerset is the limited amount of business held by the company during the early stage of executing its business plan. This limited operating profile is a restrictive factor on Somerset’s initial ratings. A.M. Best will monitor the execution of Somerset’s business plan to assess the business profile and financial metrics as trends develop.
“Positive rating action could occur if the company is able to demonstrate a track record of profitable operations along with appreciable capital and business profile trends in line with Somerset’s business plan. Conversely, negative rating action could occur if the company’s capital structure declines due to a material adverse impact to overall financial metrics during the execution of Somerset’s strategic objectives.”
