Bahrain-based Trust International Insurance & Reinsurance Co., known as Trust Re, said a downgrade from A.M. Best poses a "short-term challenge" but that it remains confident about its future despite a delay in filing full-year 2017 audited financial statements.
A.M. Best cited the delayed filing in downgrading Trust Re's financial strength rating to BB+ from A- and its long-term issuer credit rating to "bbb+" from "a-." It also kept the ratings under review with negative implications.
The agency said the downgrade reflected a revised assessment of the company enterprise risk management and governance frameworks, while the negative review status reflects uncertainty over the company's financial position.
Trust Re had said in August that its full-year 2017 filing was being delayed because of "additional regulatory requirements," and it said Oct. 16 that external auditors were reviewing a "large number of transactions." It said it would announce updates "immediately as the situation develops where we are close to completion of our audits."
The company said it remained confident in its future despite the short-term challenge of the downgrade, and it said its first-half 2018 premiums rose 13% from the prior-year six-month period. The combined ratio for the first half of 2018 was 96.5%, compared to 98.9% in the year-ago period, although it noted that those figures were unaudited.
Trust Re owns its own corporate member at Lloyd's of London, while its Trust Insurance Management unit is a coverholder for Lloyd's Syndicate 2007, which is managed by Axis Capital Holdings Ltd.'s Axis Managing Agency Ltd., Reinsurance.com wrote Oct. 16. Axis has declined to comment on the relationship between it and Trust Re, the report noted.