Asia Capital Re voluntarily withdraws from rating services

Asia Capital Reinsurance Group (ACR) has voluntarily withdrawn from all rating services of AM Best and Standard & Poor’s for the company, its parent company ACR Capital Holdings, and its subsidiary Asia Capital Reinsurance Malaysia.

This follows ACR’s December 5 2019 announcement on its intended 100 percent sale to Bermuda-based Catalina Holdings (Catalina), and the associated voluntary cessation of writing new business with immediate effect as part of the transition towards becoming a platform for Catalina’s run-off services in Asia.

On December 9 rating agency AM Best downgraded the financial strength ratings for ACR and Asia Capital Reinsurance Malaysia to ‘B++’ (Good) from ‘A-’ (Excellent) and the long-term issuer credit ratings (long-term ICR) to ‘bbb+’ from ‘a-’. AM Best also downgraded the long-term ICR to 'bb+' from 'bbb-' of the non-operating insurance holding company, ACR Capital Holdings (Singapore). AM Best placed these credit ratings under review with negative implications. Concurrently, these ratings have been withdrawn as the company has requested to no longer participate in AM Best’s interactive rating process.

As part of its new business direction, the company said it no longer views its credit ratings as necessary to conduct the run-off of its own in-force portfolio and further after the completion of the sale.

“The decision to withdraw from the rating services is an administrative step that is unrelated to the company’s exceptional financial strength and balance sheet capabilities,” ACR said in a release. “In every applicable measurement, including regulatory risk-based capital models and the rating agencies’ own models, the company’s capital position is extremely strong, with a substantial buffer over the highest level of financial strength as viewed by these stakeholders.”

ACR added: “ACR employs no financial leverage and has no debt. Its capital base comprised purely of $835 million of Tier 1 equity capital. The company’s reserves are prudent, with every significant loss event reserved on its own basis to the expected ultimate loss, over and above the company’s modelled actuarial reserve amount.”

AM Best’s ratings are withdrawn effective from December 9 2019. Standard & Poor’s has also commenced their ratings withdrawal process for ACR.

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