1 December 2014Actuarial & underwriting

AM Best affirms Micronesian captive rating

Rating agency AM Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Marble Reinsurance Corporation.

The outlook for both ratings of the Micronesia-based captive is stable.

AM Best said the ratings reflect Marble Re's solid risk-adjusted capitalisation and conservative operating strategy.

“Marble Re's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), remained strong, largely owing to its strong profitability and capital support from the parent company, Marubeni Corporation (Marubeni) (Japan),” said the rating agency.

AM Best added that the reinsurer has reported strong profitability since commencing the captive operation in Micronesia, largely owing to the favourable underwriting results led by its marine cargo line.

“In fiscal year 2013, Marble Re started expanding the product portfolio into non-marine cargo lines by leveraging the strong relationship with Marubeni's group companies. Most of the premium from the new portfolio will be ceded to third-party reinsurers, enabling Marble Re to secure stable income by earning ceding commissions,” it said.