claims paying ability rating on Bermuda-domiciled Arrow Reinsurance Company, Limited (Arrow Re).

The rating outlook for the wholly owned subsidiary of Goldman Sachs Group, Inc., a New York-based international investment banking organisation, is stable.

DCR's reaffirmation reflects the strength and explicit support of Arrow Re's parent company, the company's sound underwriting policies and controls, and its significant capital and re-insurance market expertise.

Partially offsetting these positive factors is uncertainty associated with the company's brief operating history.

Arrow Re's objective is to facilitate insurance-related risk securitisations and to provide reinsurers with access to capital markets.

The company employs a "matched book'' strategy where it first accepts and then hedges different forms of risks via reinsurance contracts or swaps and securitisations, and earns a spread based on the risk it retains.

Retained risks might include credit risk, basis risk or risks associated with differences in contract language.