AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "a-" (Excellent) of North End Re Ltd. (Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect North End Re Ltd.'s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The ratings also reflect North End Re Ltd.'s plan of maintaining strong risk-adjusted capital levels, as measured by Best's Capital Adequacy Ratio (BCAR), as the company ramps up operations in the coming years. The company expects to use external and internal revolving lines of credit to maintain these levels and to provide substantial liquidity. North End Re Ltd. closed one transaction in third-quarter 2021, reinsuring $1.6 billion of fixed deferred annuities.
North End Re Ltd.'s parent, Brookfield Reinsurance Ltd. (Brookfield Reinsurance), is a publicly traded reinsurance company focused on providing capital-based solutions to insurance companies. Brookfield Reinsurance seeks capital-intensive business to leverage its asset management and sourcing capabilities. Brookfield Reinsurance recently acquired American National Group, Inc. (NASDAQ:ANAT) in an all-cash transaction valued at approximately $5.1 billion. North End Re Ltd. geographically complements its sister company, North End Re (Cayman) SPC, which is also in its first full year of establishing reinsurance operations. The company has another sister company, Brookfield Annuity Company, that provides pension risk transfer solutions in Canada.
Slightly offsetting these favorable attributes of North End Re Ltd. and its greater organization are the high level of competition and the temporary realized investment losses caused by rising interest rates. AM Best notes that the company was quick in establishing itself in the market, showing early success against competitors; rising interest rates will be a favorable factor for the company over the longer term.
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