Sapphire Reinsurance Company (Sapphire), based in the Cayman Islands, has received a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good) from AM Best, with outlook for these ratings stable.
These ratings are indicative of Sapphire’s strong financial standing and its performance in the insurance market. Sapphire, identified as a captive reinsurer, is linked to a large, privately owned Colombian conglomerate. This conglomerate operates across various sectors in Colombia and Latin America, including industries like motor, textile, pipe manufacturing, public transport, and waste management.
The company’s insurance portfolio is primarily concentrated in the motor business line, with a significant portion of its business underwritten in Colombia. However, due to its nature as a captive insurer, Sapphire’s business profile is considered limited.
The strength of Sapphire’s balance sheet is attributed to its stable and consistently growing capital base. This stability is bolstered by effective asset-liability management and low underwriting leverage.
Sapphire has established clear policies and procedures aligned with its risk tolerance. Additionally, the company is undergoing a transformation plan aimed at digitizing its operations, which further supports AM Best’s assessment of its enterprise risk management (ERM) as appropriate.
Sapphire’s operating performance is deemed adequate, reflecting the company’s positive net income results. These results are supported by stable and improving technical ratios.
The stable outlook for Sapphire’s ratings indicates an expectation that the company will continue to achieve positive operating results and maintain its robust balance sheet strength.
AM Best noted that potential positive rating actions could be influenced by Sapphire’s ability to maintain its good operating performance consistently. Conversely, negative rating actions might occur if Sapphire encounters a decline in its risk-adjusted capitalization due to poor operating performance or capital outflows.
In other ratings-related developments, both Fontana Reinsurance Ltd. (Fontana Re) and Fontana Reinsurance U.S. Ltd. (Fontana Re US) have maintained their excellent financial ratings from AM Best.
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