HONG KONG--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Marble Reinsurance Corporation (Marble Re) (Micronesia). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Marble Re’s balance sheet strength, which AM Best categorises as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Marble Re’s balance sheet strength is underpinned by risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), at the strongest level. The company’s balance sheet strength also benefits from its low underwriting leverage and conservative investment portfolio. Although the company has relatively high reinsurance dependency, the associated risk is mitigated by its well-diversified reinsurance panel that consists of reinsurers with good financial standing.
Marble Re has a track record of favourable operating performance supported by a five-year average return-on-equity ratio of approximately 12%, driven mainly by stable investment income and very strong underwriting results. Although the company experienced a contraction in premium income during fiscal-year 2019, underwriting results remained favourable with a five-year average combined ratio under 60% (fiscal-years 2015–2019). The company also has limited potential volatility arising from its underwriting portfolio by using a conservative reinsurance programme.
Marble Re is wholly owned by the Marubeni Corporation, which is one of the largest trading companies in Japan. The company benefits from its parent’s broad business networks and trading activities and only insures and reinsures risks from affiliated and related companies within the Marubeni group. As a single-parent captive, Marble Re is well-integrated within the group and benefits from the parent company’s overall ERM practices.
Negative rating actions could occur if there is a material increase in risk appetite, which could potentially undermine Marble Re’s profitability and capitalisation. Negative rating actions could also occur if there is significant deterioration in the credit profile of its ultimate parent, Marubeni Corporation.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
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