AM Best Assigns Credit Ratings to North End Re (Cayman) SPC

Rhea-AI Summary

AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of ‘a-’ (Excellent) to North End Re (Cayman) SPC, with a stable outlook. These ratings reflect strong balance sheet strength, adequate operating performance, and appropriate enterprise risk management. NER Cayman plans to make significant capital investments to maintain a robust level of risk-adjusted capital. In a notable development, NER Cayman has executed a reinsurance transaction with American Equity Investment Life Holding Company (AEL), assuming $10 billion in annuity products, increasing its equity interest in AEL to 16%.

Positive

• Assigned A- Financial Strength Rating and 'a-' Long-Term Issuer Credit Rating indicates strong financial health.
• Planned capital investments will support risk-adjusted capital levels.
• Execution of a $10 billion reinsurance transaction with AEL enhances equity interest.

Negative

• None.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to North End Re (Cayman) SPC (NER Cayman) (Cayman Islands). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect NER Cayman’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings also reflect NER Cayman’s plan of making a significant capital investment to keep a strong level of risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR), and risk-based capital. The company expects to use external and internal revolving lines of credit.

NER Cayman also has executed a reinsurance transaction with American Equity Investment Life Holding Company (NYSE:AEL) (AEL) and now has a total combined equity interest in AEL to approximately 16%. The reinsurance transaction consist of assuming $10 billion of annuity products issued by American Equity Investment Life Insurance Company, a subsidiary of AEL.

NER Cayman’s parent, Brookfield Asset Management Reinsurance Partners Ltd. (BAM Re), is a publicly traded reinsurance company focused on providing capital-based solutions to insurance companies. BAM Re seeks capital-intensive business to leverage its asset management and sourcing capabilities. In August 2021, BAM Re announced an agreement to acquire American National Group, Inc. [NASDAQ: ANAT] in an all-cash transaction valued at approximately $5.1 billion, with the transaction is expected to close in the first half of 2022. NER Cayman geographically complements its sister company, North End Re Ltd., which also is starting its reinsurance operations. The company has another sister company, Brookfield Annuity Company, that provides pension risk transfer solutions in Canada.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220202005560/en/

Bruno Caron

Associate Director

+1 908 439 2200, ext. 5144

bruno.caron@ambest.com

Anthony McSwieney

Senior Financial Analyst

+1 908 439 2200, ext. 5715

anthony.mcswieney@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jim Peavy

Director, Communications

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

Source: AM Best

FAQ

What is the Financial Strength Rating assigned to North End Re (Cayman)?

AM Best has assigned a Financial Strength Rating of A- (Excellent) to North End Re (Cayman).

What is the significance of the reinsurance transaction with American Equity Investment Life Holding Company?

The reinsurance transaction involves assuming $10 billion of annuity products and increases North End Re's equity interest in AEL to approximately 16%.

What does a stable outlook in ratings mean for North End Re (Cayman)?

A stable outlook indicates that AM Best expects the financial strength and performance of North End Re (Cayman) to remain consistent.

How does North End Re (Cayman) plan to maintain its capital levels?

NER Cayman plans to make significant capital investments and utilize external and internal revolving lines of credit.

What are the key factors influencing North End Re's ratings from AM Best?

Key factors include strong balance sheet strength, adequate operating performance, and appropriate enterprise risk management.