AM Best has assigned a financial strength rating of B++ (Good) and a long-term issuer credit Rating of "bbb+" (Good) to Hildene Re SPC, Ltd, a Cayman Islands-based insurer. The outlook for these ratings is stable.
According to AM Best, the ratings reflect Hildene Re's very strong balance sheet, adequate operating performance, limited business profile, and appropriate enterprise risk management (ERM).
Hildene Re’s balance sheet strength is supported by risk-adjusted capitalization, which AM Best assesses at a very strong level based on its Capital Adequacy Ratio (BCAR). While the company’s assets are currently concentrated in trust preferred collateralized debt obligations, there are plans to diversify into a wider range of structured securities.
The asset portfolio is managed by professionals from an affiliated entity, and AM Best expects Hildene Re’s risk-adjusted capitalization to remain strong as the company grows.
Hildene Re’s operating performance is considered adequate. As a recently established entity, the company’s long-term profitability trends have yet to be fully evaluated. Currently, Hildene Re has active flow treaties with two US cedents and additional transactions are in progress.
Formed in 2022, Hildene Re is a Cayman Islands-domiciled insurer focusing on reinsuring single premium annuities and related retirement products, entering an increasingly competitive offshore annuity reinsurance market. The company’s business model centers on generating investment spread through asset management, while limiting exposure to complex liabilities.
The company’s ERM practices are considered appropriate, though some aspects are still under development. Hildene Re leverages a risk-focused culture from an affiliated entity, supporting its ERM framework as it builds its long-term strategy.
AM Best will monitor Hildene Re’s performance, with potential negative rating actions if there is a decline in balance sheet strength or if operating performance consistently falls short of expectations.
If ERM practices do not mature as anticipated, the ratings may also be negatively impacted. Although unlikely in the short term, positive rating actions could be considered if Hildene Re successfully implements its business strategy over time.
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