AM Best has upgraded Dunav-Re a.d.o.’s Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” (Good) from “bbb” (Good) and affirmed its Financial Strength Rating (FSR) of B++ (Good).
The Long-Term ICR outlook has been revised to stable from positive, while the outlook for the FSR is stable.
AM Best noted that the ratings reflect Dunav-Re’s strong balance sheet strength, alongside its strong operating performance, limited business profile and appropriate enterprise risk management. The ratings also benefit from rating lift from Dunav-Re’s parent company, Dunav osiguranje a.d.o. (Dunav Insurance).
The ratings agency said the Long-Term ICR upgrade reflects the rating lift applied to Dunav-Re’s ratings, which considers the company’s strategic importance to Dunav Insurance. Dunav-Re has a track record of supporting the group’s strategy and providing reinsurance support to Dunav Insurance and its subsidiaries.
At year-end 2025, Dunav-Re contributed one-fifth of the group’s consolidated gross written premium. Dunav-Re writes a growing portfolio of internationally sourced business. Dunav Insurance’s creditworthiness has improved in recent years, and the parent company is expected to provide prompt and sufficient support to Dunav-Re if needed.
Dunav-Re’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, assessed at the strongest level as measured by Best’s Capital Adequacy Ratio (BCAR). The assessment also considers the company’s solid internal capital generation in recent years and good financial flexibility as a subsidiary of Dunav Insurance.
AM Best outlined factors that partially offset the ratings, including Dunav-Re’s high exposure to Serbia’s financial system, with all of its investments held domestically, as well as its small capital base on an absolute basis, which increases the sensitivity of its risk-adjusted capitalisation to potential shocks.
Dunav-Re is also dependent on retrocession to manage domestically sourced business; however, the associated risks are partly mitigated by a stable retrocession panel of excellent credit quality.
AM Best expects prospective operating performance to be supported by Dunav-Re’s selective underwriting and stable investment income.
