am best holds a Financial Strength Rating of A- (excellent) and a Long-Term Issuer Credit Rating of “a-” (excellent) from NEWGT Reinsurance Company, Ltd. (NEWGT) (Bermuda) confirmed. The outlook of these credit ratings (ratings) is Stable.
The ratings reflect NEWGT’s balance sheet strength, which AM Best rates as strong, as well as the company’s reasonable operating performance, neutral business profile and appropriate risk management.
Balance sheet strength is well supported by NEWGT’s risk-adjusted capitalization, which is rated at the strongest level as measured by Best’s capital adequacy ratio (BCAR). The company’s balance sheet strength is also underpinned by favorable balance sheet liquidity and a healthy capital structure. Although the company relies on reinsurance to some extent, this risk is mitigated by its high quality and well diversified reinsurance panel.
NEWGT’s operating performance has been consistently stable and profitable with a five-year average net claims ratio and net combined ratio of 65% and 91% (2017-2021), respectively. For the year ended March 31, 2022, NEWGT’s underwriting profit from its general account improved to JPY226 million from JPY45 million due to the business recovery from the COVID-19 pandemic and higher commodity prices. NEWGT continued to post low but stable investment returns with its conservative investment strategy. Looking ahead, AM Best expects the company’s overall operating performance to remain profitable, with its premium income continuing to benefit from the recovery in its parent company’s trading business and its combined ratio remaining stable.
NEWGT is a wholly owned subsidiary of Itochu Corporation (Itochu), one of Japan’s largest trading companies, listed on the Tokyo Stock Exchange. As the single parent captive of Itochu, the Itochu-related shipping business continues to constitute a large majority of NEWGT’s business in terms of net premiums written. In addition, the company has…
