Nat’l Reinsurance Corp gets high financial strength rating

MANILA, Philippines -  The National Reinsurance Corp. of the Philippines (NRCP), the country’s sole domestic professional reinsurer, was assigned a financial strength rating of PRS A plus by the Philippine Rating Services Corp. (PhilRatings).

A PRS A rating means that the insurer has strong financial security characteristics, but is somewhat more likely to be affected by adverse business conditions compared to higher-rated insurance companies. The plus sign further qualifies the rating.

The assigned rating takes into consideration NRCP’s solid market franchise, shareholders of good standing, experienced management team, sound investment portfolio, and improving but still volatile profitability.

NRCP has a solid market franchise, given its status as the Philippines’ leading professional reinsurer. The company directly competes with foreign reinsurance companies with agents licensed by the Insurance Commission, and to a lesser extent with domestic insurance companies, which are also licensed to sell reinsurance.

The firm, nonetheless, has to its advantage Presidential Decree No. 1270, which mandates “all life and non-life insurance and reinsurance companies doing business in the Philippines to cede to NRCP at least 10 percent of their outward reinsurance placed with unauthorized foreign reinsurers.”

Of the licensed insurance companies in the Philippines as of Dec. 31 last year, NRCP had existing reinsurance agreements with 50 (out of 66) non-life insurance companies, all of the 27 life insurance firms and three (out of four) composite companies. NRCP’s marketing strategy is supported by its technical know-how, industry track record and familiarity with the domestic market.