Jacana Re A rating affirmed
AM Best has affirmed the Financial Strength Rating of A (Excellent) with a stable outlook of Guernsey-based captive reinsurer Jacana Re.
Jacana Re is the internal reinsurer of the BHL Group and has a track record of strong operating performance, evidenced by a five-year weighted average combined ratio and weighted average return-on-equity ratio of 85.1% and 19.9%, respectively.
"Jacana Re’s performance reflects the company’s strong underwriting discipline across the underlying books of business that it reinsures," said AM Best. "Investment income makes a small, albeit positive, contribution to overall earnings."
AM Best said Jacana Re was established in Bermuda in March, 2004 as an internal reinsurer of the BHL group and re-domiciled to Guernsey in 2013.
"The risks underwritten by Jacana Re stem from South Africa and Australia," said AM Best. "The entity is used by BHL as a risk management tool, retaining 100% of risks ceded from insurance companies of the BHL group and its ultimate shareholders. Jacana Re’s business profile assessment is constrained somewhat by the geographic concentration of premium volume and lines of business underwritten."
AM Best said the ratings reflected Jacana Re’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. In addition, the ratings consider, in the form of lift, Jacana Re’s strategic importance to its parent company, BHL, as the group’s internal reinsurer.
Jacana Re’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2023, as measured by Best’s Capital Adequacy Ratio (BCAR). The balance sheet strength assessment reflects the company’s conservative investment portfolio, which supports its excellent liquidity position, and moderate underwriting leverage. During 2022, the company received a capital injection to support its growing exposure to catastrophe risk in Australia.
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