Oldwick, NJ – AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Eastern Re Ltd., S.P.C. (Eastern Re) (Grand Cayman, Cayman Islands). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn the ratings of Eastern Re at the company’s request to no longer participate in AM Best’s interactive rating process.
The ratings reflect Eastern Re’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, very limited business profile and appropriate enterprise risk management. The ratings also reflect lift from the lead rating unit, ProAssurance Group, which is composed of subsidiaries of ProAssurance Corporation (PRA), based on implicit support.
AM Best’s assessment of Eastern Re’s business profile reflects its run-off status and its diminished future business prospects, despite an ongoing connection with the parent from shared clientele. The company’s balance sheet strength is supported by risk-adjusted capitalization that measures in the strongest category; however, it is partially offset by heightened future uncertainty due to its run-off status, which led to the final balance sheet assessment of very strong. Eastern Re’s specialization in alternative market workers’ compensation solutions and segregated portfolio cells creation and management was a growth engine for the entire ProAssurance Group. The company was put into run-off on Jan. 1, 2018, following the enactment of the Tax Cuts and Jobs Act of 2017 and all active clients moved into a new vehicle, Inova Re, Ltd. SPC (under PRA), which is a 953(d) entity paying U.S. taxes.
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