NEWGT assigned ratings by AM Best

SUNDAY, JNAUARY 13: NEWGT Reinsurance Company, LTD (Bermuda) has been assigned a financial strength rating of A- (Excellent) and issuer credit rating of “a-” by ratings agency AM Best,

The outlook assigned to both ratings is stable and reflect NEWGT’s stable operating profitability, aided by its retrocession coverage in its general account and the implicit support from the parent company, Itochu Corporation (Itochu).

NEWGT was incorporated in October 2005 as a wholly owned subsidiary of Itochu. NEWGT is a Class 3 general business reinsurer and is registered under the Segregated Accounts Company Act 2000 in Bermuda.

Best said NEWGT’s business is well diversified due to the broad range of trading business activities conducted by Itochu, which is underwritten by the general account. Under the segregated account, some
risks have been underwritten, which are well spread through personal
accident and residential fire, with the exception of the catastrophe
business, which has been in run off since January 2012.

NEWGT reported favourable operating performance in its general account over the past five years, mainly driven by its major line of marine cargo product, which is diversified globally.

Best said NEWGT’s retrocession coverage against its major product line helped it to stabilize its underwriting results during the past years. As a single parent captive, NEWGT receives support from Itochu to grow in the captive market in the form of capital injections, as well as support from its integrated risk management system.

Partially offsetting these positive rating factors include NEWGT’s
continuous expansion into the third party business, volatile operating
performance in the segregated account and the uncertain outlook of the global economy.

NEWGT will participate in Lloyd’s Syndicates in 2013, which accounts for a significant proportion of its consolidated net premium income in the forecast periods. Although Itochu will support this new business by injecting capital, the increase in the third party business could increase volatility in NEWGT’s operating performance.

NEWGT reported a sharp increase in its loss ratio in the segregated account in fiscal year 2010 as it has experienced several large claims from the catastrophe business that has been in run off since 2012.

The uncertain economy outlook could impact NEWGT’s operating performance, as the sales of marine cargo are susceptible to trading activities.
Downward rating pressure could arise if there is a sharp decline in NEWGT’s risk-adjusted capitalization led by a deterioration in its operating performance.