Reinsurance News

Building block approach highlights EMEA insurers’ robust balance-sheets: A.M. Best

14th November 2017 - Author: Staff Writer

Analysis of the European Middle East and Africa (EMEA) insurance market using A.M. Best’s new building block rating methodology approach, has shown firms’ as overall having very robust balance-sheets, adequate and strong operating performance, neutral business profiles, and appropriate enterprise risk management (ERM) structures.

A.M. Best logoAs A.M. Best implements its updated Best’s Credit Rating Methodology (BCRM), a new building block approach to provide greater detail, clarity, and transparency in its rating analysis, its recently tested and benchmarked its entire population of rated entities.

As a result of the new building block approach in testing, about 3% of A.M. Best ratings were put under review.

The building block approach starts with a baseline balance sheet strength assessment, and works through the remaining components of the rating process with a series of notching adjustments until the Issuer Credit Rating (ICR) is recommended and voted on in a committee process.

To highlight the impact of the four key building blocks in the rating determination, which are balance-sheet strength, operating performance, business profile, and ERM, the A.M. Best report excludes the impact of any lift or drag from a parent company.


As of October 17th, 2017, 87.6% of the rated EMEA-mature companies referenced in the report have “Excellent” or above ICRs, comprised of 11.2% “Exceptional & Superior” and 76.4% “Excellent.”

Another 12.4% are rated “Good” and none are at the “Fair and Below” level.

86.6% of all rated European Middle East and Africa (EMEA) region mature companies have a stable outlook, with the remainder split between negative (4.5%) and positive (2.2%) outlooks.

The relatively high rating levels and stability in the EMEA-mature group compared to others reflects the maturity of the market, as well as the fact that most rated entities happen to be on average financially stronger, more resilient and better established than the rest of the marketplace.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
Longevity risk transfer activity to grow in the UK and beyond: Prudential’s Kessler

The longevity reinsurance and risk transfer market in the UK is expected to be active in 2018 after a period...