AM Best issues FSR and credit ratings for Martello Re

AM Best, a credit rating agency, has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Martello Re Limited, an insurance and reinsurance company based in Hamilton, Bermuda, the outlook for these ratings is stable.

Martello Re’s robust balance sheet strength is primarily supported by its risk-adjusted capitalisation, as indicated by AM Best’s Capital Adequacy Ratio (BCAR).

The company benefits from extensive investment expertise through partnerships with experienced asset managers.

Recently, Martello Re secured an additional $935 million in equity commitments from both existing and new shareholders, enhancing its equity base and credit facilities.

AM Best anticipates that Martello Re will maintain its strong risk-adjusted capitalisation, positioning the company well for future growth.

In terms of operational performance, Martello Re is currently rated as adequate. While the company reported profitable results in 2023, its long-term profitability will need further assessment due to its recent establishment.

As a Bermuda Class E reinsurer specialising in life and annuity products, Martello Re focuses on managing long-term runoff liabilities. Its reinsurance portfolio includes fixed annuity and fixed indexed annuity policies, as well as pension risk transfers from MassMutual and other major US cedants.

The company’s enterprise risk management (ERM) framework is considered appropriate, featuring a risk-aware culture and a focus on long-term growth.

The management team effectively oversees risks through a detailed ERM framework and a comprehensive risk register, incorporating regular stress testing.

AM Best will continue to evaluate Martello Re’s performance, noting that significant declines in risk-adjusted capitalisation or other key balance sheet metrics could lead to negative rating actions.

Conversely, sustained improvements in operating earnings and premium growth could result in positive rating adjustments.

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