AM Best, the global credit rating agency focused on the insurance sector, has lowered the Financial Strength Rating of SanlamAllianz Re Ltd (SAZ Re), the Mauritius-based reinsurance company, to B++ (Good) from A- (Excellent).
The agency has also reduced SAZ Re’s Long-Term Issuer Credit Rating to “bbb+” (Good) from “a-” (Excellent). At the same time, AM Best has kept both ratings under review with developing implications, having changed the previous implications status from negative to developing.
AM Best said its assessment continues to take account of SAZ Re’s balance sheet strength, which it considers strong, and the company’s strong operating performance. The agency also assesses SAZ Re’s business profile as neutral and its enterprise risk management (ERM) as marginal. AM Best said the ratings additionally receive support from the strategic importance of SAZ Re to its ultimate co-shareholders, Sanlam Limited of South Africa and Allianz SE of Germany.
The downgrade follows a change in AM Best’s assessment of SAZ Re’s ERM, which has been revised to marginal from appropriate. AM Best stated that the revised assessment reflects what it described as significant weaknesses in the company’s corporate governance and control framework.
These issues resulted in a USD 71 million write-off of receivables, according to AM Best. The agency said the amount was equivalent to more than 100% of SAZ Re’s opening capital and surplus for 2025.
AM Best added that SAZ Re’s new management team carried out a detailed review of the business during 2026. The review identified further legacy misstatements, according to the rating agency, contributing to delays in the completion of SAZ Re’s 2025 year-end financial statements and prompting additional measures to address the company’s capital position.
SAZ Re has since begun implementing measures intended to strengthen its internal controls, processes and governance arrangements, AM Best said. However, the agency noted that the measures have yet to be tested over time and will need to become established within the organisation before their effectiveness can be assessed fully.
AM Best first placed SAZ Re’s ratings under review with negative implications on 29 August 2025. At the time, the agency cited uncertainty surrounding the company’s financial position following the receivables write-off.
SAZ Re subsequently reported a net loss of USD 20.4 million for 2025. AM Best said the company also recorded further losses during the first six months of 2026, placing additional pressure on its capital and surplus.
The impact of these developments was greater than the capital provided by SAZ Re’s shareholders through two remedial injections, AM Best said. The first, made in 2025, amounted to USD 47 million, while a further USD 27 million was provided in 2026.
AM Best said it expects SAZ Re to take additional measures to address any capital shortfall. The agency added that the timing and method through which the company’s capitalisation will be restored have yet to be determined.
The ratings will remain under review with developing implications while AM Best awaits SAZ Re’s recapitalisation plan and its 2026 year-end financial statements. AM Best concluded that it will then assess the impact of the company’s financial position, governance measures and other developments on its credit rating fundamentals.
