AM Best has affirmed the financial strength rating of B+ (Good) and the long-term issuer credit rating of “bbb-” (Good) for Orion Reinsurance (Bermuda) Ltd. (Orion Re), based in Hamilton, Bermuda. The outlook for both ratings remains stable.
The ratings reflect Orion Re’s strong balance sheet, adequate operating performance, limited business profile, and appropriate enterprise risk management. AM Best’s analysis highlights the company’s very strong risk-adjusted capitalization, as measured by the Best’s Capital Adequacy Ratio (BCAR), along with the expertise of its management team.
However, the ratings are constrained by the company’s size, which limits diversification and increases concentration risk. Additionally, Orion Re’s BCAR is sensitive to changes in the company’s balance sheet structure and the composition of its business portfolio.
Founded in December 2004, Orion Re is licensed by the Bermuda Monetary Authority as a class III insurer with no operational restrictions within its category. The company primarily focuses on difference in conditions insurance and also retains some life and non-life insurance business. It has established a strong presence in the public services industry and maintains strategic alliances with prominent Latin American reinsurers.
As of December 2023, Mexico accounted for 44% of Orion Re’s gross written premium, with the remaining business distributed across 13 other countries, primarily in Latin America and the Caribbean. In 2023, the company achieved premium sufficiency and has maintained profitability in most years.
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Future improvements in results are anticipated as the company executes its business expansion strategy, which is supported by income from its Rent-a-Captive business – a consistent revenue source over recent years.
For the first half of 2024, Orion Re reported net income of US$121,795 and a loss ratio of 36%, reflecting efforts to manage claims effectively. The company’s BCAR has shown improvement since 2019, attributed to a conservative approach to investment policies, which has reduced asset risk.
However, due to the company’s size and operational scope, its BCAR remains sensitive to changes in the balance sheet structure and the composition of its business portfolio.
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