AM Best affirms Orion Re

AM Best has affirmed its financial strength rating of B+ (Good) and the long-term issuer credit rating of “bbb-” (Good) for Orion Re. It has given a stable outlook to the ratings.

“The ratings reflect Orion Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management,” the ratings agency said.

“The ratings also reflect the company’s strongest risk-adjusted capitalization, as measured by Best’s capital adequacy ratio (BCAR), and the expertise of its management team. Partially offsetting these positive rating factors is the small size of the company, which limits business diversification given the inherent concentration risk,” it added.

Established in December 2004 and licenced by the BMA to act as a class III insurer without restrictions of any kind in its class, Orion’s main line of business is difference in conditions insurance, but the company also retains specific life and non-life insurance business. As of December 2020, its gross written premium was concentrated in Colombia and Mexico, with the rest primarily throughout Latin America and the Caribbean.

“Orion Re’s growth has fluctuated over the past five years, which is consistent with the small size of the company. Premium sufficiency has yet to be achieved; however, the company has maintained marginally profitable bottom-line results, which are expected to improve as the company’s business expands. The results also are supported by the income from the rent-a-captive business, which has presented a consistent growth over the past years,” Best said.