AM Greatest confirms Nat Re’s stability amid 2023 positive factors

AM Greatest has reaffirmed the Nationwide Reinsurance Company of the Philippines (Nat Re) with a Monetary Power Ranking of B++ (Good) and a Lengthy-Time period Issuer Credit score Ranking of “bbb” (Good), citing a steady outlook for each.

The Philippines’ solely home reinsurer has seen its risk-adjusted capitalization stay on the strongest degree regardless of challenges posed by important premium development in 2023.

Nat Re’s steadiness sheet energy, assessed as sturdy, is underpinned by its risk-adjusted capital, as measured by the Greatest’s Capital Adequacy Ratio (BCAR). Though premium development has lowered capitalization ranges, the general monetary place stays strong.

The corporate’s funding portfolio is seen as reasonable threat, with most property in fixed-income securities issued by the Philippine authorities. Regardless of publicity to pure catastrophes, this threat is partly offset by a retrocession program that helps handle potential losses.

Working efficiency continues to be rated as sufficient, with a five-year common return-on-equity of three.6%. In 2023, Nat Re reported a notable enhance in web revenue as a consequence of higher underwriting efficiency and improved funding outcomes. The development was pushed by decrease acquisition and administration bills, however the non-life portfolio confronted important losses and reserve strengthening, which affected the general loss ratio.

In the meantime, funding revenue, primarily from curiosity and dividends, remained a optimistic contributor to the corporate’s earnings.

AM Greatest additionally views Nat Re’s enterprise profile as impartial. The corporate advantages from sturdy relationships with native insurers and obligatory cessions, whereas new alternatives by authorities initiatives and native underwriting services have enabled it to increase its enterprise past obligatory necessities.

Nat Re’s acquisition of overseas agriculture treaties in 2023 has bolstered diversification efforts, however the firm might want to preserve sturdy underwriting threat administration to maintain development.