AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “a” (Excellent) from “a-” (Excellent) of Polskie Towarzystwo Reasekuracji S.A. (Polish Re) (Poland). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Polish Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The ratings also reflect the lift Polish Re receives due to the support provided by its ultimate parent, Fairfax Financial Holdings Limited (Fairfax) [TSX: FFH], in particular the explicit parental guarantee in place for Polish Re. In addition, Fairfax provides technical support in areas such as reserving, retrocession protection and investment management services. Fairfax’s commitment to Polish Re was demonstrated by its PLN 78 million (USD 18 million) capital injection in 2023.

The upgrades reflect the greater strength of the company’s balance sheet, underpinned by prudent capital management, modest growth level and positive reserve development.

Polish Re’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), was at the strongest level at year-end 2025, and it is projected to remain at the same level in the medium term. Further supporting factors are Polish Re’s low dependence on retrocession and conservative investment strategy. Reserve development has been positive since 2024. Prior to 2024, the runoff of motor third-party liability business exhibited material volatility.

Polish Re’s adequate operating performance assessment is supported by a five-year (2021-2025) average combined ratio of 95.4% and a five-year (2021-2025) average return-on-equity ratio of 10.7% (both as calculated by AM Best). The company’s underwriting performance improved in 2025, as evidenced by a combined ratio of 92.0% (2024: 97.8%) (as calculated by AM Best). Robust investment results supported an overall net profit of PLN 85.6 million (USD 23.8 million). Prospectively, investment income is expected to be a consistent contributor to the company’s profitability.

Polish Re benefits from a diversified underwriting portfolio, with operations spanning approximately 40 markets. The company’s largest markets, as based on gross written premium in 2025, are Poland, Turkey and Israel. Additionally, the company has expanded its agriculture line of business significantly in recent years.

AM Best considers Polish Re’s ERM to be developed and appropriate for its risk profile and operational scope.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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