AM Best has decided to maintain its under review with negative implications status for the credit ratings of Humboldt Re Limited, ahead of a change in ownership for the reinsurer.
Humboldt Re entered runoff in December 2020 alongside fellow Guernsey domiciled reinsurance vehicle Kelvin Re.
Both businesses were managed and backed by capital from the Credit Suisse Insurance Linked Strategies Ltd. team.
However, a sale purchase agreement has recently been signed that will see Humboldt Re acquired by new owners.
AM Best says its decision to keep the unit under review reflects its uncertainty about the potential impact to Humboldt Re’s financial strength that such a deal might entail.
Currently, AM Best considers Humboldt Re to have a Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent).
The rating agency expects to resolve the under review status once the purchase agreement transaction has completed, and when a full analysis of the company’s credit fundamentals can be performed within its new group structure.
Since Humboldt Re entered runoff ceased writing new business last year, its underwriting exposures have reduced and its reported capital has increased. The company produced a small profit in the first quarter of 2021.
