Finial Reinsurance Receives Top AM Rating | Insurance business America
The company is also known as an indirect subsidiary of Berkshire Hathaway
reinsurance
By Kenneth Araullo
AM Best has affirmed a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) for Stamford, Connecticut-based Finial Reinsurance Company, an indirect subsidiary from Berkshire Hathaway.
Both ratings have been assigned a Stable Outlook based on the robust balance sheet, which AM Best rates as very strong. The company also benefits from adequate operational performance, a limited business profile and an effective enterprise risk management (ERM) framework, it said.
Key to these ratings is the company’s exceptional risk-adjusted capitalization, as determined by Best’s Capital Adequacy Ratio (BCAR). This strength is somewhat offset by the company’s limited future business scope, as the company has not written significant premiums since it began deleveraging in 2004.
In recent years, Finial Reinsurance’s capital growth has been driven primarily by investment returns. Notably, the company’s surplus increased significantly due to its exposure to the stock markets, although it recorded a decrease to $628 million at the end of the third quarter of 2023, compared to $892 million at the end of 2022.
This decline was primarily the result of a $370 million dividend payment, most of the proceeds of which were used by parent company Finial Holdings Inc. to pay off its outstanding government debt. The invested assets are managed by Berkshire.
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2024-02-16 14:00:00
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