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A.M. Best Affirms Credit Ratings of Société Tunisienne de Réassurance

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A.M. Best has affirmed the Financial Strength Rating of B+ (Good)
and Long-Term Issuer Credit Rating of "bbb-" of Société Tunisienne de
Réassurance
(Tunis Re) (Tunisia). The outlook of these Credit
Ratings (ratings) is stable.

The ratings reflect Tunis Re's balance sheet strength, which A.M. Best
categorises as very strong, as well as the company's adequate operating
performance, limited business profile and appropriate enterprise risk
management (ERM).

Tunis Re's balance sheet strength is underpinned by its risk-adjusted
capitalisation, which is maintained at the strongest level, as measured
by Best's Capital Adequacy Ratio (BCAR), good financial flexibility and
moderate dependence on retrocession when excluding market pools that the
company manages. However, with over 85% of assets invested domestically,
the company remains heavily exposed to the high financial system risk in
Tunisia, which is an offsetting rating factor. Additionally, A.M. Best
expects that the onerous dividend policy, determined as a percentage of
paid-up capital, will constrain future retained earnings.

Tunis Re's operating performance is considered adequate, supported by
solid investment returns and positive, albeit volatile, technical
results. The company reported a five-year weighted average combined
ratio of 97.9% and return on equity of 7.6% for the period of 2013-2017.
Net income decreased by TND 4.5 million to TND 13 million in 2017, with
the company reporting a technical loss from a series of higher than
expected large claims.

Tunis Re's business profile assessment takes into account its leading
position in its domestic market, in addition to the diversification into
regional markets it has achieved over recent years. The company's
operations, however, remain limited on a global scale and its ability to
grow its portfolio whilst maintaining good quality business may be
hampered due to increasing competitive pressures in the market.

Tunis Re has been focusing on strengthening its risk management
capabilities in recent years. A.M. Best expects further developments in
the company's ERM framework in the medium term, including the third
party validation of the capital model that Tunis Re has been developing
over recent years. A.M. Best will continue to assess how these risk
management tools are effectively deployed into the company's operations.

This press release relates to Credit Ratings that have been published
on A.M. 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 A.M. Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is the world's oldest and most authoritative insurance
rating and information source. For more information, visit
www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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