AM Best Affirms Credit Ratings of CattRe S.A.

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of CattRe S.A. (CattRe) (Luxembourg). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect CattRe’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings also consider, in the form of rating lift, AM Best’s expectation that Assicurazioni Generali S.p.A. (Generali) will provide explicit support to CattRe if needed.

CattRe’s balance sheet strength benefits from its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which was at the strongest level in 2021. AM Best expects the company’s risk-adjusted capitalisation to remain at the strongest level in the medium term. Limiting factors to the balance sheet strength assessment include the company’s dependence on retrocession, its material exposure to Italian sovereign bonds and the potential for volatility in capitalisation metrics, driven by the company’s small capital base.

CattRe’s operating performance has been broadly in line with management’s expectations since Società Cattolica di Assicurazione S.p.A. (Cattolica) launched the company in 2018. In 2021, the company reported a pre-tax profit of EUR 0.4 million and a combined ratio of 98% (2020: 88%), as calculated by AM Best. CattRe’s 2021 technical performance was negatively impacted by the Bernd flooding losses in Germany. In 2022, technical results are expected to improve. However, this improvement is expected to be offset by non-technical losses driven by market value reductions in the company’s fixed income investment portfolio.

CattRe is a wholly owned subsidiary of Cattolica based in Luxembourg that focuses on reinsuring specialty lines. The company uses managing general agent (MGA) subsidiaries in Italy to source business. Additionally, CattRe reinsures business written by other subsidiaries of Cattolica in Italy. The company has seen strong growth since inception, with gross written premium amounting to EUR 111 million in 2021.

CattRe is regulated by the Luxembourg regulator, the Commissariat aux Assurances, and follows the Solvency II regulation. The company manages key risks through an effective control framework, which includes outsourced functions, such as underwriting controls at its subsidiary MGAs. AM Best expects that CattRe will benefit from the Generali group’s well-developed control system framework.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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