Marco Re receives excellent ratings

What's behind the assessment?

Marco Re receives excellent ratings


By Kenneth Araullo

Guernsey-based Marco Re has received excellent ratings from AM Best as it plays an integral role for its parent firm.

Marco Re acts as the primary entity for handling legacy property and casualty re/insurance business within Marco, making it the group’s largest risk carrier. Its formation, announced earlier this month, was completed via a merger of Marco subsidiaries Humboldt Re and Kelvin Re.

The reinsurer received a financial strength rating of A- (Excellent) and a long-term issuer credit rating of “a-” (Excellent). These ratings come with a stable outlook, and, as AM Best explains, are testament to the company’s robust consolidated balance sheet, which is considered very strong, along with its satisfactory operational performance, balanced business profile, and effective enterprise risk management strategies.

Since its entry into the European legacy re/insurance market in May 2020, backed by €500 million in equity capital from funds managed by Oaktree Capital Management, Marco has amassed over €700 million in legacy reserves across various international re/insurance markets.

Beyond this, Marco is enhancing its presence through a growing insurance services division, offering management and technical services primarily to the Lloyd’s and London markets.

In line with its business objectives, Marco is expected to uphold a higher level of consolidated risk-adjusted capitalization, as determined by Best’s Capital Adequacy Ratio (BCAR). The company’s balance sheet benefits from several off-balance sheet protections, effectively minimizing reserving risk.

However, AM Best noted an increased execution risk as Marco aims to enlarge its legacy reserves portfolio through additional transactions, potentially affecting its risk-adjusted capitalization volatility.

“We are delighted that AM Best recognizes the financial strength and business model of Marco Re. We have transformed the DNA of Marco Re from its original entities and present the market with a financially and operationally sound P&C Legacy carrier specialized in solving complex issues, for risk and/or capital management needs,” Marco Re CEO Mark Elliott said.

“Marco’s approach has consistently been to deliver solutions which best address a client’s real objectives, often devising solutions which stretch beyond the proposal initially presented to us. With its rated paper, Marco Re is now able to provide even more attractive and superior solutions to its international P&C re/insurance clients, extending the range of possibilities we offer,” Marco Capital Group CEO Simon Minshall said.

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