Aurigen Reinsurance Co. and Bermuda-based Aurigen Reinsurance Ltd. have been affirmed the financial strength rating of A- (excellent) and issuer credit ratings of "a-" by AM Best Co. The outlook for all ratings is stable.

Best said that the ratings of Aurigen Reinsurance Co. and Aurigen Reinsurance Ltd. (collectively known as Aurigen) are based upon its excellent risk-adjusted capital position, modest consolidated earnings as well as the start-up nature of the operation, which is focused on the Canadian life reinsurance marketplace.

During the past year, despite the economic volatility experienced in the Canadian market, Aurigen was able to generate revenues, maintain a robust capital position and modestly gain traction in an increasingly concentrated market, said the ratings agency. Best views Aurigen's business plan as opportunistic, and believes it may be difficult for Aurigen to foster new relationships in an established and concentrated market.

Best maintains the position that continued uncertainties exist with respect to the successful execution of Aurigen's business plan, along with its limited operating history. Aurigen's new business activity during its first two years of operation is below Best's expectations as assumed business volumes are below Aurigen's original business plan. In addition, although the ratings agency believes that Aurigen has strong capital to achieve its objectives over the medium-term, the company may potentially need to reach out to the capital markets or conduct an initial public offering to raise capital, if growth outpaces projected levels.