AM Best Revises Outlooks to Positive and Affirms Credit Ratings of Worldwide Reinsurance Limited

AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Worldwide Reinsurance Limited (Worldwide Re) (Trinidad and Tobago).

The Credit Ratings (ratings) reflect Worldwide Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management (ERM).

The positive outlooks reflect Worldwide Re’s reinforcement to its balance sheet strength through enhancements to its non-proportional retrocession structure and decreased exposure to catastrophe-prone zones, limiting large deviations in property claims, as well as the company’s maintenance of consistent surplus growth.

Worldwide Re launched operations in 2013 to provide reinsurance capacity for property, marine and liability lines of business and is diversified geographically throughout Europe, where the majority of business is currently located, Asia, Central America, South America and the Caribbean. Worldwide Re operates through a network of brokers and intermediaries.

The ratings also reflect Worldwide Re’s good and sustained underwriting quality and profitability, solid capital management and geographically diversified premiums. Partially offsetting these positive rating factors are Worldwide Re’s marginal ERM profile, although it has shown signs of improvement, as well as the highly competitive landscape in its target geographic markets amid a challenging economic environment.

The company´s capital base has grown consistently over time through reinvestment of earnings, reflecting a compound annual growth rate of 8% as of 2023, mainly driven by sound underwriting practices.

In 2023, Worldwide Re recorded a combined ratio of 82.6% and a return on equity of 11.4%, enabled by well-contained claims and operating expenses, as well as a release of excess reserves. Additionally, AM Best expects future acquisition expenses to offset deviations in claims as the company decreases its risk retention while expanding consistently in target geographies in hand with a good reinsurance security panel. Financial income continues to support Worldwide Re’s results; however, the company is not dependent on this revenue to achieve positive bottom-line results. Worldwide Re constantly reviews its underwriting guidelines to improve the performance of business segments that are deviating from targets.

Even though the operating performance of the reinsurer has been adequate through its business cycle, AM Best is of the view that Worldwide Re must continue to develop its ERM framework further in terms of risk management tools and corporate governance structure to safeguard its sound operating performance and risk-based capital position.

Positive rating actions could occur if Worldwide Re is able to sustain improvements in its balance sheet assessment while maintaining its current level of risk-adjusted capitalization, or further develop its ERM profile. Negative rating actions could occur if the company´s operating performance deteriorates to a level no longer supportive of the ratings.

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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