Bahrain: Trust Re remains confident despite rating downgrades
Source: Middle East Insurance Review | Nov 2018
Following previous statements released by Trust Re regarding delay in releasing consolidated financial statements for the year ended 31 December 2017 causing its rating to be placed under review, Trust Re announced that A.M. Best has downgraded its Financial Strength Rating to B++ (Good) from A- (Excellent) with the Long-Term Issuer Credit Rating changing to “bbb+” from “a-”. Both ratings remain under review with negative implications.
The ratings reflect Trust Re’s balance sheet strength, which the agency categorises as very strong, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management (ERM).
The rating downgrades reflect the agency’s revised assessment of Trust Re’s ERM and governance frameworks following extended delays in the release of its audited financial statements for the year ended 31 December 2017. The under review with negative implications status reflects uncertainty regarding the financial position of the company in light of the delayed publication of its financial statements. The ratings are expected to remain under review pending publication of the company’s audited financial statements for year-end 2017 and the agency’s subsequent assessment of the rating fundamentals of Trust Re.
The reinsurer stated that it continues to work with its stakeholders to address these matters and that it will announce any updates immediately, as the situation develops. Furthermore, Trust Re confirmed its commitment to timely claims payment asserting that claims in excess of $300m have been settled this year, of which over $130m were in large claims. The company affirmed that it benefits from a strong and reliable retro programme with its internationally ‘A’ rated partners.
Moreover, Trust Re stated that its operating performance is sound. It also said that its premiums grew exceeding 13% during 1H18 compared to the prior year period. Combined ratio for 1H18 was 96.5% compared to 98.9% in 2017 (unaudited figures), consistent with its five years average performance combined ratio of 95.7%.
Trust Re reassured its commitment to meet its liabilities and to deliver reliable services with the same high standard to its respected clients and business partners. M