Rating agency AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Marco Re Limited (Guernsey), simultaneously assigning a stable outlook to these ratings.
Macro Re, a wholly-owned subsidiary of Marco Capital Holdings Limited (Malta), was launched earlier this month as the new brand of merged Guernsey subsidiaries Humboldt Re and Kelvin Re.
These ratings reflect Marco’s consolidated balance sheet strength which has been assessed as very strong, the reinsurer’s adequate operating performance, neutral business profile and appropriate enterprise risk management, explains AM Best.
Marco entered Europe’s legacy insurance and reinsurance sector in 2020 with €500 million of equity capital committed by funds managed by Oaktree Capital Management. Since then, the group has acquired over €700 million of legacy reserves spanning international re/insurance markets.
Additionally, the group has a growing insurance services division that provides a range of management and technical services to the Lloyd’s and London markets.
AM Best stated, “Marco has a senior management team with extensive experience in its target business area and an experienced board of directors that participate in key decision-making.”
The rating agency also assessed the group’s business plans which are expected to maintain the strongest level of consolidated risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s balance sheet strength is safeguarded by several off-balance sheet protections, which materially reduce reserving risk, says the ratings agency.
AM Best does warn that there is heightened execution risk as the group looks to scale up its book of legacy reserves through new transactions, which could potentially generate volatility in risk-adjusted capitalisation. However, Marco has so far achieved good performance since its inception and has demonstrated sound risk selection, says AM Best.
