AM Best has affirmed the financial strength rating of B++ (Good) and the long-term Issuer Credit Rating (Long-Term ICR) of “bbb” (Good) of Bermuda-based Sura Re.
Sura Re is the wholly owned captive reinsurer of Suramericana S.A. (Sura), which in turn is 81.1% owned by Colombian financial services conglomerate Grupo de Inversiones Suramericana S.A.
Sura Re participates in property business underwritten by Sura’s affiliates across Latin America to help the group achieve its goals.
The ratings reflect Sura Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The outlook of the ratings is stable.
In December 2022, Sura Re reported a positive net profit for the fourth consecutive year since its inception.
Operative performance was driven by technical results, backed by good underwriting practices and strong fee income.
AM Best said it recognises the greater relevance that Sura Re is aiming to achieve in Sura’s overall regional strategy, which is starting to be reflected with Sura’s expanded geographic scope.
During 2022, capital requirements continued to reflect higher premium risk as the company executes its strategy and retains a higher portion of risks.
AM Best expects Sura Re’s capital requirements to increase due to a larger deployment of its capital while supporting its current very strong level assessment of risk-adjusted capitalisation.
AM Best said the company’s asset-liability management follows a very conservative investment policy focused on maintaining liquidity to cover Sura Re’s obligations in terms of tenure and currencies.
The ratings agency also considers the company’s ERM practices as appropriate given the complete support by Sura’s expertise and management team.
Bring part of the third largest insurance group in Latin America provides flexibility in terms of growth and premium risk to manage its capital and return positions efficiently in the future.
“AM Best therefore considers operating performance to be adequate for the current ratings,” the ratings agency said.
“Negative rating actions could take place if the company fails to meet its financial performance objectives, with results that fall to a level that impacts capital, and therefore, its risk-adjusted capitalization, either by business decisions, importance to its financial group or deteriorating macroeconomic conditions.”