A.M. Best Assigns Ratings to Marble Reinsurance Corporation
HONG KONG -- February 22, 2013
A.M. Best Asia-Pacific Limited has assigned a financial strength rating of A-
(Excellent) and issuer credit rating of “a-” to Marble Reinsurance Corporation
(Marble Re) (Federated State of Micronesia). The outlook assigned to both
ratings is stable.
The ratings reflect Marble Re’s strong risk-adjusted capitalization, stable
operating profitability, strong retrocession coverage and the support from the
parent company, Marubeni Corporation.
As a single parent captive of Marubeni Corporation, Marble Re’s risk–adjusted
capitalization, as measured by Best’s Capital Adequacy Ratio, remains strong
to support the assigned ratings. Marble Re’s absolute capitalization is
expected to further increase primarily due to strong profitability and capital
injection from the parent company of Marubeni in early 2013. Marble Re
reported a combined ratio of an average of 52% in the past five years, with a
range from 49.7% to 57.4% as it focuses on marine cargo line risk. The new
product portfolio generated from Marubeni Corporation’s group of companies,
which reported a favorable track record in underwriting results, could support
the operating profitability in the future. Marble Re maintains a conservative
underwriting guidance with a limited retention and retrocession coverage of an
aggregate stop loss cover against marine cargo line.
Partially offsetting rating factors include an implementation risk in Marble
Re’s expansion plan as well as an uncertain outlook of the economy conditions.
Although Marbubeni Corporation has a long history in operating captive
businesses, the expansion of product lines would cause risk in its
implementation. As Marble Re’s major product line is marine cargo, of which
sales are susceptible to trading activities, weakening trading activities
would lead to a sharp drop in premium income, and consequently, could impair
its operating performance.
While upward movement on Marble Re’s ratings is unlikely, downward pressure
could arise if there is a sharp decline in its risk-adjusted capitalization.
The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilized include: “Risk Management and the Rating
Process for Insurance Companies”; “Understanding Universal BCAR”; “Rating
Members of Insurance Groups”; “Evaluating Country Risk”; “Catastrophe Analysis
in A.M. Best Ratings”; and “Rating New Company Formations.” Best’s Credit
Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more information,
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Company, Inc.
Seewon Oh, +852-2827-3404
Senior Financial analyst
Moungmo Lee, +852-2827-3402
Rachelle Morrow, +(1) 908 439 2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
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