AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to PanAsia Reinsurance Inc. (PanAsia Re) (Hawaii). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect PanAsia Re’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

PanAsia Re’s balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), appropriate investment mix and conservative loss reserves demonstrated and projected in each of the five years of the pro forma.

PanAsia Re’s adequate operating performance assessment is based on its operating profitability over the past three years, with expectation it will scale its book of business in accordance with its strategic business plan, including pro forma operating results over the next five years.

The company’s limited business profile assessment reflects its geographic concentration writing small personal property damage, health and accident policies for its diversified parent and affiliates. PanAsia Re is domiciled in Hawaii with all its business currently written in Japan. The parent is engaged mainly in the primary distribution across its several affiliate companies. The management team of PanAsia’s holding company, Hikari Tsushin, Inc., has extensive experience in insurance, risk management and financial services.

PanAsia Re’s ERM is considered appropriate for its risk profile, overall underwriting, risk management and risk tolerance. Management understands its risks, reviews vulnerabilities and manages risks within its risk appetite and tolerances. The ERM function is led by the head of risk in collaboration with the company’s risk consultant enterprise risk committee, audit committee and investment committee, which meet frequently to discuss key business risks.

Finally, the company benefits from implicit and explicit support and financial flexibility provided by Hikari Tsushin, Inc. PanAsia Re also benefits from its parent’s robust, enterprise–wide policies and procedures in the areas of risk management, corporate governance, and compliance.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

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