The B++ (Good) financial strength rating and the “bbb” (Good) long-term issuer credit rating of Bermudian-based Sura Re have been affirmed by AM Best, the credit ratings agency.

AM Best said the outlooks for these credit ratings were stable.

It added that the ratings reflected 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.

Sura Re is a captive reinsurer, wholly owned by Suramericana SA, which AM Best said was 81.1 per cent owned by Grupo de Inversiones Suramericana SA.

The agency said the company was established in Bermuda as a Class 3A insurer in December 2015.

In April of last year, AM Best added, approval was granted by the Bermuda Monetary Authority to operate as a Class C insurer.

The agency said Sura Re participated in property business underwritten by Sura affiliates across Latin America to help the group achieve its strategic regional goals.

AM Best recognised the greater relevance that Sura Re was aiming to achieve in Sura’s overall regional strategy, which was starting to be reflected with Sura’s expanded geographic scope.

The agency assesses the company’s balance sheet strength as very strong, as its risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio, is “more than adequate for the risks it holds”.

AM Best said: “During 2022, capital requirements continued to reflect higher premium risk as the company executes its strategy and retains a higher portion of risks; going forward, 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.”

It added: “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.”

AM Best considers the company’s ERM practices as appropriate “given the complete support by Sura’s expertise and management team”.

Last December, AM Best said, the company reported positive net profit for the fourth consecutive year since its inception.

It added: “Operative performance was strongly driven by technical results, backed by good underwriting practices and strong fee income.”

AM Best said it “remains attentive to macroeconomic conditions and its impact on the company’s investment results.

“The captive nature of the company within 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.”

But it added: “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 capitalisation, either by business decisions, importance to its financial group or deteriorating macroeconomic conditions.”