Standard & Poor’s Ratings Services has affirmed its ‘BBB-‘ long-term counterparty credit and insurer financial strength ratings on Tunisia-based BEST Reinsurance Co (Best Re).
The outlook on both ratings is stable.
“The affirmation reflects Best Re’s strong underlying underwriting performance, good business position, and capitalisation, but also its limited financial flexibility,” says Standard & Poor’s credit analyst Emmanuelle Cal íÂ¨s.
A well-established mid-sized player in its core markets, Best Re is a regional reinsurance company covering low-risk business lines in developing countries. The company has been expanding through a successful, decentralised business model with local offices.
Standard & Poor’s expects that Best Re will continue to benefit from the general upturn in the property/casualty reinsurance market in 2003, with an expected 20% increase in net premiums written. Earnings should increase gradually during the next two years thanks to the maintenance of a strong loss ratio (below 55%) and to tight expense controls.
Premium income growth should be matched by a corresponding capital increase. The company’s currently limited, although improving, financial flexibility is regarded as the main constraint on the rating at the current level.