ITOCHU captive GUNA Re secures rating, targets third-party business
AM Best has assigned a Financial Strength Rating of A- (Excellent) to GUNA Re (Cayman Islands), the single-parent captive for ITOCHU Corporation established in February 2026. The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect GUNA Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
GUNA Re was established for ITOCHU Corporation with a plan for all existing businesses to be novated from NEWGT Reinsurance Company, which is the existing captive insurer of ITOCHU in Bermuda.
The re-domiciliation is being undertaken to support the expansion of third-party business. ITOCHU is one of the largest general trading companies in Japan.
GUNA Re’s balance sheet strength assessment reflects the strongest level of projected risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which is based on the company’s business plan.
Although GUNA Re’s underwriting risks stemming from anticipated business expansion are likely to remain a predominantly capital consumption factor, AM Best notes that management intends to carefully monitor and control the pace of business expansion with appropriate capital management to maintain the company’s current level of risk-adjusted capitalisation. The assessment is further supported by GUNA Re’s projected conservative investment strategies and low dependence on retrocession.
GUNA Re’s adequate operating performance assessment reflects the expectation that it will achieve overall profitable results based on its business plan, which projects low double-digit return-on-equity (ROE) and favourable combined ratios for the next five years. The company anticipates moderate growth in gross written premium and underwriting profits over the next five years.
While the operating performance will be mainly supported by the expansion of third-party business, the ITOCHU-related captive business will remain a steady contributor.
Although the third-party business expansion may lead to some erosion of underwriting control for GUNA Re compared to its group-related captive business, AM Best notes that the expansion includes growth of businesses sourced through the parent’s global relationships and affiliated channels, which could partially mitigate the potential risk. Overall, GUNA Re’s core business objective as a captive insurer and its several competitive advantages including strict governance of the group, and cautious and selective underwriting management remain the same.
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