As the beginning of 2024 unfolds, reinsurance company Ocean International Reinsurance Company Limited (Ocean Re) has received a positive review from AM Best, a global credit rating agency specializing in the insurance industry. This review has upgraded Ocean Re’s outlook from stable to positive, in addition to confirming its strong Financial Strength Rating (FSR) of “A-” (Excellent) and its Long-Term Issuer Credit Rating (ICR) of “A-” (Excellent).
The ratings assigned to Ocean Re reflect the strength of its balance sheet, rated as the strongest by AM Best, along with adequate operating performance, a neutral business profile, and appropriate risk management. These aspects are crucial for assessing the company’s financial strength and stability.
Simultaneously, Ocean Re’s positive outlook review is based on its underwriting discipline, which has demonstrated the ability to deploy capital profitably. Furthermore, operational performance metrics show a positive trend, supported by a growth strategy focused on geographic diversification, exploring new business opportunities, and success in expanding its risk portfolio.
Ocean Re and its strategic commitment to growing reinsurance
Ocean Re is recognized as a reinsurer domiciled in Barbados, licensed as a Class 2 insurance company, offering a wide range of products globally, with a relevant global focus. The company also provides facultative reinsurance programs, which are fully funded according to its clients’ latest expected loss. Its business development strategy prioritizes increasing the proportion of traditional reinsurance business compared to the captive portfolio.
Recently, Ocean Re’s geographic distribution has experienced continuous growth, with a presence in over 135 countries and strategic markets. This geographic expansion allows for greater diversification of insured risks across various regions, such as Latin America, Europe, and the MENA region. To further enhance its underwriting capacity, the company has acquired operations from business partners, providing it with expertise and exclusivity in various channels, regions, and markets.
Future outlook: Ocean Re’s diversification strategy and rating actions
Ocean Re’s risk-adjusted capitalization remains at a solid level, supported by Best’s Capital Adequacy Ratio (BCAR) and bolstered by a capital injection received in early 2020, as well as profitable results until September 2023. However, AM Best will continue to closely monitor the holding company’s influence on Ocean Re’s balance sheet strength, particularly regarding financial leverage and the evolution of the corporate structure.
Ocean Re’s operational performance has been positive in 2022 and up to September 2023, with favorable net results derived from its strong underwriting capacity in traditional and captive reinsurance business. These results indicate a consolidation of underwriting strategy in some markets, while others are still in the development phase, with appropriate risk management policies and procedures to mitigate any future risks.
Regarding future rating actions, AM Best anticipates that a satisfactory advancement in Ocean Re’s diversification strategy, accompanied by positive indicators in its operational performance, will lead to favorable evaluations.
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