Golden Tree Reinsurance secures stable credit ratings from AM Best

Golden Tree Reinsurance secures stable credit ratings from AM Best | Insurance Business America

Reinsurance

Golden Tree Reinsurance secures stable credit ratings from AM Best

Focus on capital growth and U.S. expansion supports its positive outlook

Reinsurance

By
Mav Rodriguez

AM Best has reaffirmed the Financial Strength Rating of B++ (Good) and Long-Term Issuer Credit Rating of “bbb” (Good) for Golden Tree Reinsurance Limited, citing the company’s strong financial position and stable outlook.

The Bermuda-based reinsurer has seen consistent growth since its establishment by parent company Iris Financial Services Limited (IFS) and ultimate owner Springbrook Capital Ltd. Its balance sheet strength, alongside its adequate operating performance and sound enterprise risk management, were key factors in the rating decision.

Established in 2015 and licensed as a Class 3A insurer in 2019, Golden Tree primarily reinsures commercial credit and credit life risks, with a geographic focus on the Colombian insurance market.

Despite challenges from a competitive environment and a concentration in one business line, Golden Tree has begun diversifying its offerings by expanding into new specialty lines and providing coverage to third parties. Its connection with IFS provides operational synergies, contributing to its growing business profile.

The company’s capital base has also shown consistent growth, driven by strong underwriting practices, resulting in a 29.8% return-on-equity ratio in 2023. AM Best expects Golden Tree to remain an integral part of the group’s strategy, especially as it expands its geographic footprint into the U.S. market.

Golden Tree’s ratings could improve with further business diversification and sustained operating performance, while any significant capital loss or aggressive dividend policy could lead to a downgrade, AM Best noted.