AM Best assigns credit ratings to reinsurers from the Dominican Republic | Insurance business America
The credit agency outlines options for positive or negative action
reinsurance
By Kenneth Araullo
AM Best has assigned a Financial Strength Rating of B (Fair) and a Long-Term Issuer Credit Rating of ‘bb+’ (Fair) to Reaseguradora Santo Domingo, SA (REASANTO) in the Dominican Republic, with the outlook for these ratings being Stable.
According to the credit agency, the ratings reflect REASANTO’s balance sheet strength, rated as strong by AM Best, along with adequate operational performance, limited business profile and adequate enterprise risk management (ERM).
Founded in 1973 in Santo Domingo, REASANTO operates primarily in the fire service and related businesses in the Dominican Republic. Due to geographic and business concentration, the company’s business profile is considered limited.
According to AM Best, the company continues to manage its potential maximum loss risk through active management of its reinsurance program with the aim of reducing the volatility of its capital base. These efforts are supported by a conservative investment strategy and an adequate reinsurance panel.
REASANTO’s operating performance is considered adequate based on constant net income supported by controlled expenses and entitlements. This approach helps reduce company budget variances and improve underwriting quality.
The company’s ERM is also considered adequate, with defined policies and procedures to maintain risk tolerance levels that are reviewed regularly.
The stable outlook reflects AM Best’s expectation that REASANTO will maintain its current level of risk-adjusted capitalization as it pursues its strategy of geographic expansion.
AM Best noted that potentially positive rating changes could occur if REASANTO’s balance sheet strength improves through sustained growth in its capital base and prudent management that supports stable risk-adjusted capitalization levels.
Conversely, erosion of the company’s capital base due to weaker operating performance could lead to negative rating changes.
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2024-07-04 13:10:00
www.insurancebusinessmag.com
