AM Best has affirmed the financial strength rating of A- (excellent) and the long-term issuer credit rating of “a-” (excellent) of Micronesia-domiciled Marble Reinsurance Corporation (Marble Re).
Marble Re is a wholly owned subsidiary and a single-parent captive of Marubeni, a major general trading company in Japan, providing reinsurance and insurance protection against group-related risks across different regions. The outlook of these credit ratings is stable.
While Marble Re continues to explore further diversification of its business portfolio, marine cargo will remain the company’s primary focus in the intermediate term.
Am Best said moderate volatility exists in the firm’s marine cargo risk, primarily due to a high correlation with the trading business of its parent.
The company has made a strategic decision recently to raise the net retention limit for its non-marine business.
Marble Re’s underwriting profitability is expected to remain stable given the historically low loss ratio of the existing business and its modest contribution to the total portfolio.
The captive’s underwriting profitability metrics have remained relatively stable mainly due to stringent underwriting guidelines and a conservative reinsurance programme that helps reduce potential underwriting volatility.
The ratings reflect Marble Re’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
Marble Re’s operating performance has been consistently strong, with a five-year average combined ratio of 59% (2019-2023).
For the fiscal year ended 31 March 2024, the company recorded moderate growth in both premium income and net profit, while its combined ratio remained stable and below 55%.
AM best said negative rating actions could arise if Marble Re’s operating performance materially and adversely deviates from its business plan to a level that no longer supports the current assessment.
Negative rating also could occur if there is a significant deterioration in Marubeni’s credit profile, including its operating profitability, financial leverage and interest coverage levels.
“Positive rating actions could occur if Marble Re demonstrates sustained and notable improvement in its balance sheet strength fundamentals or material growth in its capital base,” AM Best said.