AM Best assigns stable credit ratings to PanAsia Re

Global credit ratings agency AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to PanAsia Reinsurance Inc. (PanAsia Re), with the outlook assigned to these Credit Ratings being stable.

According to Best, the ratings reflect PanAsia Re’s balance sheet strength, which the agency assesses as very strong.

The agency also cited the company’s adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

PanAsia Re is domiciled in Hawaii with all its business currently written in Japan.

Moreover, Best noted that PanAsia Re’s balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), appropriate investment mix and conservative loss reserves demonstrated and projected in each of the five years of the pro forma.

At the same time, PanAsia Re’s adequate operating performance assessment is based on its operating profitability over the past three years. There is also an expectation that the firm will scale its book of business in accordance with its strategic business plan, including pro forma operating results throughout the next five years.

The agency also highlighted how PanAsia Re’s limited business profile assessment reflects the company’s geographic concentration writing small personal property damage, health and accident policies for its diversified parent and affiliates.

PanAsia Re’s parent is engaged mainly in the primary distribution across its several affiliate companies. The management team of PanAsia’s holding company – Hikari Tsushin, Inc., has valuable experience across the insurance, risk management and financial service sectors.

Further, Best also stated that PanAsia Re’s ERM is considered appropriate for its risk profile, overall underwriting, risk management and risk tolerance. The ERM function is led by the head of risk in collaboration with the organisation’s risk consultant enterprise risk committee, audit committee and investment committee.

Best concluded by noting that the company benefits from implicit and explicit support and financial flexibility provided by Hikari Tsushin, Inc., as well as this, PanAsia Re also benefits from its parent’s robust, enterprise–wide policies and procedures in the areas of risk management, corporate governance, and compliance.

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