AM Best Upgrades Credit Ratings of Somerset Reinsurance Ltd. and Somerset Reinsurance Company

AM Best has upgraded the Financial Strength Ratings to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “a” (Excellent) from “a-” (Excellent) of Somerset Reinsurance Ltd. (Somerset Re) (Hamilton, Bermuda) and Somerset Reinsurance Company (SRC) (Orlando, FL). The outlook of Somerset Re’s Credit Ratings (ratings) has been revised to stable from positive. The outlook of SRC’s ratings is stable.

The ratings of Somerset Re reflect the company’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The ratings of SRC reflect the company’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

Somerset Re and SRC are focused on providing reinsurance solutions for asset-intensive life insurance and annuity business, including programs for new business flow and management of legacy blocks of life insurance and annuities.

The rating upgrades reflect Somerset Re’s ability to execute on its business plan, including positive core earnings trends in profitability and premium growth and also reflect SRC’s support of the overall business plan.

Somerset Re’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is expected to remain at the strongest level. Liquidity is assessed as more than adequate to fund anticipated short-term obligations of the current blocks of business held on the company’s balance sheet.

Furthermore, Somerset Re continues to enhance its position in its markets of operation as it continues to execute reinsurance agreements each year with known rated insurers in line with the company’s business plan. Experience-related metrics are showing strong evidence of prudent pricing and investment management discipline.

AM Best anticipates capital infusions to continue that will support further new business growth over the intermediate term without the need to access additional funding.

The companies are backed by a very experienced reinsurance management team with deep ties to the industry. The ERM programs are well-developed and currently appropriate for the companies’ business operations.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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