Rating agency AM Best has upgraded the Financial Strength Rating to A+ (Superior) from A (Excellent) and the Long-Term Issuer Credit Rating to “aa-” (Superior) from “a” (Excellent) of MS Reinsurance, and has assigned a stable outlook to the ratings.
AM Best highlights the additional explicit support that MS Reinsurance receives from Mitsui Sumitomo Insurance Company, in the form of the recently enacted parental guarantee, as a reason for the rating upgrades.
As noted by the rating agency, MS Reinsurance is a direct subsidiary of Mitsui Sumitomo Insurance, which itself is a core subsidiary of MS&AD.
The ratings also reflect the reinsurer’s balance sheet strength, which AM Best assesses as very strong, and also its adequate operating performance, neutral business profile, and appropriate enterprise risk management.
“In addition, MS Reinsurance’s ratings benefit from rating enhancement, in the form of lift, due to support provided by its ultimate parent, MS&AD Insurance Group Holdings, Inc. (MS&AD),” says AM Best.
The rating agency goes on to highlight the appointment of new management at the firm from 2020, as well as a series of remedial measures which have been taken to improve underwriting performance and lower the volatility of its book.
Further, MS Reinsurance has undertaken some strategic initiatives in recent times, including reducing catastrophe exposure and exiting underperforming accounts.
AM Best says that the result of these actions became visible last year, when the reinsurer achieved a combined ratio of 96%, which was also supported by hard reinsurance market conditions.
“Prospectively, MS Reinsurance is expected to report profitable and less volatile underwriting results,” says AM Best.
