Singapore Reinsurance Corporation Limited (Singapore Re) has been spotlighted by AM Best for its impressive financial and operational attributes. The company exhibits a strong balance sheet, competent operating performance, and effective enterprise risk management, all while reaping the benefits of its association with parent company Fairfax Financial Holdings Limited.
The balance sheet of Singapore Re stands firm, with its risk-adjusted capitalisation projected to maintain the highest level in the medium term as gauged by the Best’s Capital Adequacy Ratio (BCAR). The investment portfolio is conservatively managed, mainly comprising cash, deposits, and fixed-income securities, with a cautious approach to higher-risk equities. Retrocession is astutely utilized to handle catastrophe risks and major single exposures, and its recoverables are chiefly from highly rated counterparties. The financial support from Fairfax bolsters the company’s capital robustness.
Operating performance has been rated as adequate, strengthened by enhanced underwriting outcomes and consistent investment earnings. Historically, underwriting results have been erratic due to market competition and natural catastrophes. However, recent times have witnessed a favorable turn, attributed to positive claims experience and business expansion. In 2023, Singapore Re registered an operating profit of S$7.3 million, a dip from S$48 million in 2022 because of a one-off reserve adjustment related to IFRS 17. But the year-to-date 2024 results suggest a return to the desired profitability, driven by investment income from interest and dividends. Looking forward, AM Best anticipates that Singapore Re’s operating performance will remain stable, aided by cautious underwriting strategies and growth in crucial markets.
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