AM BEST has affirmed the credit rating and outlook for the National Reinsurance Corp. of the Philippines (Nat Re), citing its robust balance sheet, as supported by its strong capitalization.
The debt watcher said in an Oct. 9 statement that it maintained Nat Re’s Financial Strength Rating of B++ (Good), Long-Term Issuer Credit Rating of “bbb” (Good), and Philippines National Scale Rating of aa+.PH (Superior), with a stable outlook.
“The ratings reflect Nat Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management,” AM Best said.
It said Nat Re’s balance sheet strength is supported by its risk-adjusted capitalization, which was at the strongest level at end-2025.
It added that it has good financial flexibility as majority of its assets are allocated to government securities.
However, NatRe’s balance sheet remains sensitive to outsized natural catastrophe events, it said, but these potential risks could be partially mitigated by its retrocession program.
AM Best also assessed the reinsurer’s operating performance to be adequate as its five-year average return on equity ratio was at 6.8% as of 2025. This was backed by its improved underwriting performance last year, driven by favorable claims development in its nonlife portfolio and robust margins from its growing life business.
“Investment income, arising mainly from interest and dividend incomes, continues to contribute positively to operating earnings,” it added.
Meanwhile, Nat Re’s business profile is neutral, AM Best said.
“The company is the sole domestic reinsurer in the Philippines, benefiting from strong relationships with local cedants and access to business through mandatory local cessions,” it said.
“Nat Re is well-positioned for business opportunities emanating from local government initiatives and new service offerings, which include engagement in the design and launch of underwriting facilities in the Philippine market, enabling it to write greater business volumes in excess of the level stipulated by the mandatory cessions,” AM Best added. “The company writes nonlife and life reinsurance, and its underwriting portfolio is viewed to be diversified moderately by geography.”
Nat Re recorded a reinsurance premium income of P1.81 billion as of end-June, down by 17% year on year, according to its financial statement.
Its net underwriting income inched down by 1% to P298.4 million, while net profit was up 13% to P397.3 million. — Aaron Michael C. Sy