Singapore Re sees positive shift in underwriting

Thanks to favourable claims experience and business growth. 

Singapore Reinsurance Corporation Limited (Singapore Re) flaunted a strong balance sheet, adequate operating performance, and appropriate enterprise risk management, alongside the benefits of parental backing from Fairfax Financial Holdings Limited, according to AM Best.

Singapore Re’s balance sheet strength remains robust, with risk-adjusted capitalisation expected to stay at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR). 

The company maintains a conservative investment portfolio primarily consisting of cash, deposits, and fixed-income securities, with measured exposure to higher-risk asset classes like equities. 

Retrocession is strategically employed to manage catastrophe risks and large single exposures, with recoverables concentrated amongst highly rated counterparties. 

The financial flexibility provided by Fairfax further reinforces the company's capital resilience.

Operating performance is assessed as adequate, bolstered by improved underwriting results and steady investment income. 

Whilst underwriting results have historically been volatile due to competitive pressures and natural catastrophe losses, recent years have seen a positive shift driven by favourable claims experience and business growth. 

Singapore Re reported an operating profit of S$7.3m in 2023, a decline from S$48m in 2022 due to a one-off reserve adjustment related to IFRS 17. 

Year-to-date 2024 results indicate a return to targeted profitability, supported by investment income from interest and dividends. 

Looking ahead, AM Best expects operating performance to remain stable, aided by prudent underwriting practices and growth in key markets.