A.M. Best Affirms Ratings of Marble Reinsurance Corporation

  A.M. Best Affirms Ratings of Marble Reinsurance Corporation

Business Wire

HONG KONG -- November 13, 2013

A.M. Best Asia-Pacific Limited has affirmed the financial strength rating of
A- (Excellent) and the issuer credit rating of “a-” of Marble Reinsurance
Corporation (Marble Re) (Federated State of Micronesia). The outlook of both
ratings is stable.

The ratings reflect Marble Re’s robust risk-adjusted capitalization and
conservative operating strategy. Marble Re’s risk-adjusted capitalization, as
measured by Best’s Capital Adequacy Ratio, has remained strong and is expected
to improve in the mid-term, owing to strong profitability and a capital
injection from the parent company, Marubeni Corporation (Marubeni) (Japan).

Marble Re reported strong profitability with an average 35% return on equity
in the past three years, largely owing to its favorable underwriting results.
The combined ratio remained at an average of 52% during the period with
limited volatility. With enhanced capitalization through its parent’s capital
injection in April 2013, Marble Re began expanding the product portfolio from
fiscal year 2013 by leveraging the strong relationship with Marubeni’s group
companies. Most of the premium from the new portfolio will be ceded to the
third party reinsurers as Marble Re could secure stable income by earning
ceding commissions, which indicates the limited underwriting risk from the new
businesses.

Partially offsetting rating factors include an implementation risk regarding
Marble Re’s plan to expand its business portfolio and its parent company’s
credit risk profile. The expansion of product lines would create risk in its
implementation given that the business scope has been limited up to marine
cargo risk, despite Marubeni’s long history in operating its captive business.
As a single parent captive of Marubeni, Marble Re has received a wide range of
support regarding capitalization, management team and its risk management
scheme. As such, Marble Re’s business relies on Marubeni’s credit risk profile
and competitiveness.

While upward movement on Marble Re’s ratings is unlikely, downward pressure
could arise if there is material deterioration in Marble Re’s risk-adjusted
capitalization or significant downward movement in Marubeni’s credit risk
profile.

A.M. Best remains the leading rating agency of alternative risk transfer
entities, with more than 200 such vehicles rated throughout the world. For
current Best’s Credit Ratings and independent data on the captive and
alternative risk transfer insurance market, please visit
www.ambest.com/captive.

The methodology used in determining these interactive 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. Best’s Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.

Ratings are communicated to rated entities prior to publication, and unless
stated otherwise, the ratings were not amended subsequent to that
communication.

A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best Company. A.M. Best
Company is the world's oldest and most authoritative insurance rating and
information source. For more information, visit www.ambest.com.

       Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contact:

A.M. Best Company, Inc.
Seewon Oh, +852-2827-3404
Senior Financial Analyst
seewon.oh@ambest.com
or
Moungmo Lee, +852-2827-3402
General Manager
moungmo.lee@ambest.com
or
Rachelle Morrow, +(1) 908 439 2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com
 
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