Tropical Reinsurance Company Limited’s (“Tropical Re”) ratings balance the reinsurer’s high-risk operating environment, developing business profile and relative resilience in the financial profile. Despite the difficult review year trading conditions in the primary market, characterised by hyperinflation, the reinsurer maintained an upward progression in market status and healthy through-the-cycle earnings. Furthermore, a relatively resilient balance sheet supported strong risk adjusted capitalisation and intermediate liquidity, albeit highly sensitive to unstable macroeconomic and sector dynamics.
The Evolving Outlook reflects the unstable impact of the economic environment on the reinsurer’s credit protection metrics. In GCR’s view, credit protection metrics could be secured within the current strengthened range should the reinsurer sustain the relative advantage from foreign currency underwriting and an inflation insulated balance sheet.