Fitch gives Swiss reinsurer Echo Re new rating
Fitch Ratings has given Swiss reinsurer Echo Rückversicherungs (Echo Re) an Insurer Financial Strength (IFS) rating of A-.
Fitch said the rating reflected the benefits of Echo Re’s ownership by German insurer DEVK, which helped lift Echo Re’s Standalone Credit Profile (SCP) by three notches from ‘BBB-’.
The rating agency said Echo Re was “very important” to its parent company, while the Swiss subsidiary benefitted from support in risk management, reinsurance expertise and capital.
Fitch added Echo Re’s SCP reflected strong capitalisation, but this was partly offset by a less favourable business profile and weak underwriting profitability. The agency said it believed Echo Re was exposed to some volatility in its capital position due to its small size and rapid recent growth.
However, Fitch added that the underwriting performance of Echo Re had improved and become less volatile in the past five years.
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