MS Re’s rating upgraded to A
MS Reinsurance’s move to reduce volatility and improve its underwriting performance has been rewarded with a ratings upgrade.
Zurich-based MS Amlin AG, which trades as MS Re and has an operating hub in Bermuda, has had its Financial Strength Rating upgraded to A+ from A with a stable outlook by AM Best.
“Following the appointment of new management from 2020, a series of remedial measures have been taken to improve underwriting performance and lower volatility of MS Reinsurance’s portfolio,” the ratings agency said. “Strategic initiatives include reducing catastrophe exposure and exiting underperforming accounts.
“The results of these measures, combined with hard market conditions, became visible in 2023, when the company achieved a combined ratio of 96% (as calculated by AM Best, based on Swiss Code of Obligations figures) or approximately 90% under IFRS. Prospectively, MS Reinsurance is expected to report profitable and less volatile underwriting results.”
Am Best said the ratings reflected MS Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. In addition, MS Reinsurance’s ratings benefit from rating enhancement, in the form of lift, due to support provided by its ultimate parent, MS&AD Insurance Group Holdings, Inc. (MS&AD).
The rating upgrades reflect the additional explicit support that MS Reinsurance receives from Mitsui Sumitomo Insurance Company, Limited (MSI), in the form of a parental guarantee that was enacted recently. MS Reinsurance is a direct subsidiary of MSI, which itself is a core subsidiary of MS&AD.
MS Reinsurance’s balance sheet strength is underpinned by its very strong risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), in 2022 and 2023. BCAR scores declined in recent years as a result of operating losses and strong premium growth but are expected to recover moderately and remain at least at the very strong level.
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