A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Central Reinsurance Corporation (Central Re) (Taiwan). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Central Re’s strong risk-adjusted capitalization, favorable operating results and solid presence in Taiwan’s reinsurance market as the sole domestic reinsurer.
Central Re maintains strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Its favorable earnings are underpinned by positive underwriting and investment income. The company’s life portfolio has delivered a track record of stable underwriting profit, which over the years has reduced earnings volatility from its non-life business.
Offsetting rating factors include the challenges Central Re faces in the current soft reinsurance market conditions and its potential earnings and capital volatility in light of its catastrophe exposures. Compared with its regional peers, Central Re has high net catastrophe loss retention relative to its total capital and surplus.
Positive rating actions are unlikely in the near term. Negative rating actions could result from material decreases in the company’s risk-adjusted capitalization or from sustained deterioration in its operating performance.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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