AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of NEWGT Reinsurance Company, Ltd. (NEWGT) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect NEWGT’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

NEWGT’s balance sheet strength is well-supported by its risk-adjusted capitalisation, which is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). As of the financial year ending on 31 March 2025 (fiscal-year 2024), the company showed somewhat elevated underwriting risks from significant premium growth during the period, and the company expects to maintain a similar level over the coming years. Despite that, NEWGT is viewed to have enough capital buffer, which is underpinned by its stable internal capital generation and conservative investment portfolio. The company has a moderate level of reinsurance dependency; however, its exposure to potential credit risk is mitigated partially by a high-quality and well-diversified reinsurance panel.

NEWGT’s operating performance has been consistently positive during the most recent five-year period. For fiscal-year 2024, while premium income from businesses related to its ultimate parent, ITOCHU Corporation (ITOCHU), and a third-party increased in fiscal-year 2024, net income moderately dropped. This was due to sizeable reserves mainly booked to reflect uncertainty in U.S. tariffs and potential underwriting losses in Thailand from the Myanmar earthquake in March 2024. Going forward, AM Best expects some volatility will accompany the company’s expansion plan into non-marine business that carries higher net retention. Nevertheless, NEWGT’s operating performance is expected to remain profitable given its prudent underwriting practices and reinsurance programmes.

As a wholly owned subsidiary and captive insurer of ITOCHU, one of Japan’s largest general trading companies, NEWGT provides reinsurance protection against group-related risks across various regions. While the majority of NEWGT’s business is ITOCHU-related marine business, NEWGT has been exploring third-party businesses and diversifying its portfolio into non-marine businesses. NEWGT is well-integrated within the group with respect to risk management, corporate governance and internal control systems.

Negative rating actions could occur if NEWGT’s risk-adjusted capitalisation deteriorates significantly, such as through heightened underwriting risk or an excessive dividend payout to ITOCHU. Negative rating actions also could arise if there is significant deterioration in ITOCHU’s credit profile, including its operating profitability, financial leverage and interest coverage levels. Although unlikely in the near term, positive rating actions could occur if NEWGT demonstrates sustained and notable improvement in its underwriting and operating profitability for a period of time, while maintaining a robust level of risk-adjusted capitalisation.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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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