AM Best upgraded Ocean International Reinsurance Co., Ltd. (Ocean Re)’s financial strength rating to A (Excellent) from A- (Excellent), its long-term issuer credit rating to “a” (Excellent) from “a-” (Excellent), and the rating outlook was adjusted to stable from positive.
AM Best noted that the upgrade reflected Ocean Re’s “very strong” balance sheet strength and operating performance, neutral business profile and appropriate enterprise risk management. The rating upgrade is also due to Ocean Re’s strong underwriting discipline.
AM Best explained that the company’s operating performance metrics are strong and supported by growth targets based on the successful growth of its diversified geographic investments, new business and venture capital portfolio.
Ocean Re is a Barbados-based reinsurer licensed as a Tier 2 insurer with a diversified product portfolio globally and a strong presence in Latin America.
It also offers a temporary reinsurance program that fully funds clients’ expected ultimate losses. AM Best explained that Ocean Re’s business development strategy clearly states that traditional reinsurance will account for an increased proportion of its portfolio compared to its captive portfolio.
The reinsurer continues to expand its regional geographic footprint, with operations in 86 countries as of December 2024, and has the ability to further diversify its insurance risks across regions such as Latin America, Asia, and the Middle East and North Africa.
In addition, it acquires the operations (including personnel) of certain business partners to further improve its underwriting, gaining expertise and exclusivity in these channels, geographies and markets.
Ocean Re’s risk-adjusted capital is at its strongest level, according to Best’s capital adequacy ratio (BCAR), and it will benefit from earnings performance in the first nine months of 2025.
AM Best said: “Ocean Re’s operating results in 2024 and to September 2025 delivered net profit, driven by the performance of its expanding traditional reinsurance business and good premium adequacy levels due to the nature of its captive business.”
Additionally, broader geographic diversification may reflect improved capital requirements over the medium term; however, AM Best will continue to monitor the holding company’s impact on Ocean Re’s balance sheet strength due to its financial leverage and changing corporate structure.
Credit rating agencies will continue to monitor reinsurers for any changes in their ratings or outlook going forward.
