Fitch Ratings on Aug. 8 modified the outlook of Dominican Republic-based Rehsa Cia. De Reaseguros SA to positive from stable and affirmed its national scale rating at BB+(dom).
The rating agency said the positive outlook reflects the company's improvements in technical profitability and combined ratio along with the policy of reinvesting profits, which continues to support its growth in premiums.
If the company can consolidate the improvements, it could operate with a stronger credit profile, Fitch noted, which would put it ahead of its peers.
In addition the rating reflects the concentration of premiums per customer in Rehsa's portfolio and the high exposure of its catastrophic contract, Fitch said.
Despite sustained increases in reinsurance business results, Fitch said it believes that the main challenge for Rehsa is to continue to increase its operating income, so that overall profitability is less dependent on financial and other nonoperating income.