New head of claims at Canopius
Canopius acquisition completed
AM Best has removed from under review with negative implications and affirmed the financial strength rating (FSR) of A- (Excellent) and the long-term issuer credit rating (long-term ICR) of “a-” of Canopius US Insurance.
In addition, AM Best has removed from under review with negative implications and downgraded the FSR to A- (Excellent) from A (Excellent) and the long-term ICR to “a-” from “a” of Canopius Reinsurance (Canopius Re - previously known as Sompo Japan Canopius Reinsurance). The outlook assigned to these ratings is stable.
The rating agency said that these actions follow the 8 March 2018 announcement by Canopius, the parent company of Canopius Re and Canopius US, that it has been acquired by a private equity consortium led by Centerbridge Partners.
The ratings of Canopius US and Canopius Re benefit from their strategic importance to and integration within the Canopius group. The ratings reflect Canopius’ balance sheet strength, which AM Best said it categorises as strong, as well as its adequate operating performance, neutral business profile, and appropriate enterprise risk management.
Canopius’ balance sheet strength is underpinned by prospective risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), being at the strongest level, a conservative investment strategy and a reinsurance panel of good credit quality. An elevated level of catastrophe risk in recent years has resulted in volatile risk-adjusted capitalisation. Following the change in ownership, Canopius has lowered its risk appetite and AM Best expects a corresponding reduction in catastrophe exposure. Financial leverage at Canopius’ intermediate parent is considered moderate and has a neutral impact on the group’s balance sheet strength assessment.
According to AM Best Canopius’ established specialist profile enables it to generate a flow of profitable business, although the group operates in highly competitive markets. An experienced management team is expected to enable Canopius to successfully navigate the business cycle and deliver good, albeit potentially volatile, underwriting results.
AM Best, Canopius, sale, ratings, stable, outlook, review