A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and issuer credit rating of “aa-” of Risk Reinsurance Limited (RRL) (Cayman Islands). The outlook for both ratings is stable.
The ratings reflect RRL’s superior capitalization and balance sheet strength, profitable results, as well as the strategic role it performs as a captive insurance company for Transpower New Zealand Limited (Transpower), a state-owned enterprise of the Government of New Zealand. New Zealand has experienced extensive quake activity within the past 18 months, and RRL has exhibited excellent maintenance of adequate surplus levels. RRL cedes excess exposure layers to reinsurers with strong financial strength ratings, and it does not insure any third-party risks. All investment assets are placed in a conservative and highly liquid portfolio consisting of cash equivalents and bonds. RRL benefits from Transpower’s strict adherence to the New Zealand regulatory risk management framework, enhanced by its own integration within Transpower’s risk structure.
Potential negative rating movement exists if RRL does not continue to be supported by Transpower with regard to its surplus level
