AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of ‘a’ (Excellent) of Active Capital Re Insurance Limited (Active Re), based in Barbados. The outlook for these credit ratings remains stable.

These ratings are based on Active Re’s balance sheet strength, which AM Best assesses as the strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The stable outlook also reflects the company’s ability to maintain sound operating performance, supported by consistent underwriting practices and a strong capital structure.

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Active Re’s rating affirmation is due to its stable profitability, supported by a focused underwriting strategy that adapts to economic conditions and delivers strong operating performance compared to its peers.

In addition, Active Re’s reinsurance program and risk management framework are appropriate for its risk profile. However, the company operates in a competitive environment in its target geographic markets, which it addresses through global expansion.

Founded in 2007 and headquartered in Barbados, Active Re is a reinsurance company whose portfolio at year-end 2023 comprised property/casualty (44%), surety (15%) and relatives (41%) net written premiums.

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The company has a diverse geographic presence in Latin America, the Middle East, Europe and Asia Pacific, with a focus on short-term non-catastrophic risks. Active Re continues to adapt to the current economic landscape by innovating internal processes to enhance decision-making.

Active Re’s capital base has seen continued growth through dividend reinvestment and capital contributions, maintaining its risk-adjusted capital at the strongest level.

The company’s conservative underwriting leverage is reflected in a net profit-to-surplus ratio of 1.4x. However, Active Re’s ratings could face pressure from uncertainty surrounding future underwriting performance as the company expands into new geographies, automates contracts, and manages general agents.

In 2023, while expanding its business, Active Re was able to maintain its net profit results by controlling acquisition expenses. The company focused on high-quality underwriting, and allocating acquisition expenses to mandated underwriters with strong technical performance. As of June 2024, Active Re continues to report underwriting metrics consistent with its performance in 2023.

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