Jeff Burt, chairman and chief executive officer of Somerset
31 May 2023News

Somerset Re subsidiary gets A- financial strength rating

AM Best has assigned a financial strength rating of A- (Excellent) to the Florida subsidiary of Bermuda-based Somerset Reinsurance, which provides reinsurance solutions to the US life insurance and annuity market.

The ratings agency said the outlook for Somerset Reinsurance Company was stable.

AM Best said the ratings reflected SRC’s balance sheet strength which was assessed as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

It said SRC was expected to rely on its parent, which was bought by US private equity firm Aquarian Holdings in January, for services as it expanded its business profile.

"To manage its business growth and regulatory capital requirements, SRC is expected to receive capital support over its planned growth period as needed," AM Best said. "That planned growth is moderately aggressive in the early years of expansion, where the company is expected to seek reinsurance opportunities for products on the low to moderate risk continuum.

"The management team has deep industry expertise and is expected to leverage its use of direct channels, brokers and strategic partners to garner its new business opportunities and its US domicile should open up more domestic-sourced business in its target market."

AM Best said the rating was also "afforded one notch of lift off of Somerset Re Ltd", adding: "The addition of SRC adds the Somerset Re Group brand flexibility to conduct business in the US insurance market. AM Best also expects SRC’s operating capabilities to be fully integrated for non-underwriting activities and co-sourced with Somerset Re Ltd. for external functions as well."

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