AM Best has revised Singapore Re’s outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed its rating of “a” (Excellent).
The agency also affirmed the company’s Financial Strength Rating (FSR) of A (Excellent), with a stable outlook.
These ratings reflect Singapore Re’s balance sheet strength, considered storing by AM best, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The positive outlook reflects AM Best’s confidence that Singapore Re will continue its trend of favourable underwriting and operating performance in the near-to-medium term.
The company posted a return-on-equity (ROE) ratio of 21.3% in 2024, with favourable results continuing into the first half of 2025. A significant portion of these earnings comes from investment income, primarily from interest and dividends.
AM Best expects this strong performance to continue, driven by healthy business growth and the company’s commitment to prudent underwriting discipline.
Additionally, Singapore Re’s ratings also benefited from the company’s ultimate parent, Fairfax. The credit rating agency noted that while the reinsurer’s operations are a small part of Fairfax’s overall business, the company is strategically important to Fairfax’s global expansion plans.
This relationship is favourable for Singapore Re, as it provides it with access to shared resources and financial flexibility.
According to the rating agency, Singapore Re’s strong balance sheet is underpinned by its risk-adjusted capitalisation, which is expected to remain at the strongest level.
The company’s investment strategy is cautious, focusing on cash and fixed-income securities, while its use of retrocession helps it manage exposure to large risks and catastrophic events.
Finally, AM Best assesses Singapore Re’s business profile as limited. Singapore Re is a modest-sized non-life reinsurer based in Singapore, writing treaty and facultative business primarily in Asia and the Middle East, with its top 2024 markets being Singapore, India and China.
While it faces some cedant concentration risk, this is mitigated by long-standing relationships and business with other companies within the Fairfax Group.
The post AM Best revises Issuer Credit Rating outlook to positive for Singapore Re appeared first on ReinsuranceNe.ws.
