A Bermuda captive of one of Japan’s largest general trading companies has had its excellent financial strength rating affirmed by credit ratings agency AM Best.

The rating agency affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of NEWGT Reinsurance Company, Ltd. The outlook of these Credit Ratings is stable.

NEWGT Reinsurance Company, a subsidiary of Itochu, was given a financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent).

AM Best called NEWGT’s balance sheet strength strong and its operating performance adequate. It also gave NEWGT a neutral business profile and said it had appropriate enterprise risk management.

“NEWGT’s balance sheet strength is well-supported by its risk-adjusted capitalisation, which is assessed at the strongest level, as measured by Best’s capital adequacy ratio,” AM Best reported.

As of NEWGT’s fiscal year end on March 31, the firm’s capital and surplus increased by 21 per cent mainly from increased retained earnings, with no dividend upstream made during the period.

“The company has a moderate level of reinsurance dependency; however, its exposure to potential credit risk is mitigated partially by a high-quality and well-diversified reinsurance panel,” the credit ratings agency said.

According to AM Best, NEWGT’s operating performance has been consistently positive during the most recent five-year period.

“For the fiscal year ended 31 March 2024, the gross premium and net premium earned from Itochu-related business, remained relatively flat as its premium income became normalised from the strong growth in the previous year,” AM Best said. “Its underwriting profit showed improvement with favourable loss experience during the period.”

Notwithstanding the moderate volatility in the major lines of marine cargo business due to the impact of commodity price fluctuations, AM Best expected NEWGT’s operating performance to remain profitable over the intermediate term given the company’s prudent underwriting practices and reinsurance programmes.

As a wholly-owned subsidiary and captive insurer of Itochu, NEWGT provides reinsurance protection against group-related risks across various regions.

The majority of its business comes from Itochu-related marine business, and the remaining portfolio consists of a diverse mix of non-life business lines, including theft insurance, renters’ insurance, and group personal accident.

AM Best said: “NEWGT is well-integrated within the group with respect to risk management, corporate governance and internal control systems.”