AM Best affirms ASR Re’s financial strength rating

AM Best has affirmed the financial strength rating of B++ (‘good’) of ASR Re, a Bermuda-based African reinsurance underwriter. This reflects ASR Re’s balance sheet strength, adequate operating performance, limited business profile and appropriate enterprise risk management.

ASR Re is a wholly-owned subsidiary of ASR Holdings and is the primary risk carrier within the ASR group, a new entrant in the African corporate specialty reinsurance market. ASR Re is exposed to the high levels of economic, political and financial system risks that are associated with operating in the African specialty reinsurance market, although this is mitigated partially by good geographic diversification.

The group has a senior management and underwriting team in place that has good experience in the targeted classes of business and operating environment, which AM Best says increases the likelihood of market acceptance and successful execution of its business plan.

The group started with $20 million of common shareholders’ equity from a $50 million facility managed by Helios Investment Partners. Another $20 million was drawn in 2021 and AM Best expects the remaining $10 million of committed capital to be drawn down over the short to medium term. About $28 million was used to capitalise ASR Re in 2021.

An offsetting factor in the balance sheet strength assessment is the small absolute size, by international standards, of ASR Re’s capital and surplus, AM Best said, but this is offset partly by its relatively small net line size and the good credit quality of its retrocession panel.