KBRA, the rating agency, has affirmed the rating of AeBe ISA. The agency said the rating of A- reflects the incorporated segregated account company’s high quality of capital, strong risk-based capitalisation, strong management team, rebalanced investment portfolio with a solid liquidity profile, strong enterprise risk management framework and sound management of the company’s exposure to interest rate risk.

The rating agency believes that the Incorporated Segregated Accounts Company framework provides AeBe with a strong corporate structure and operational flexibility.

At year-end 2024, AeBe ISA's Bermuda Solvency Capital Requirement was 274 per cent. As AeBe continues to execute its business plan, KBRA expects this ratio to decline but remain strong over the medium term.

AeBe ISA Ltd is an incorporated segregated account of Agam Bermuda ISAC Ltd, registered under the ISAC Act, sponsored by 26North Partners LP, a fully integrated, multi-asset class investment platform, founded and led by Josh Harris.

KBRA said: “AeBe benefits from an experienced management team with deep expertise in reinsurance, asset management and the Bermuda market. AeBe has a robust enterprise risk management framework and KBRA expects AeBe’s risk management programme to evolve and mature as the company grows.

“As a reinsurer of asset intensive life and annuity liabilities, AeBe is exposed to interest rate risk that can generate spread compression or incentivise disintermediation in different rate environments.

“KBRA believes that Agam Bermuda’s proprietary pALM platform provides AeBe with an integrated approach to analyse, price and manage its business in real time across all levels of the company, thereby mitigating exposure to asset-liability mismatches. In addition, AeBe has repositioned the overall investment portfolio to achieve additional book yield while maintaining credit quality.

“Balancing these strengths are AeBe's elevated leverage metrics, limited earnings diversification and extant execution risk to achieve scale within the competitive life/annuity reinsurance market. Leverage metrics deteriorated in 2024, as the balance sheet grew from annuity business arising out of legacy block and forward flow agreements with AeBe's second counterparty.

“Due to its limited tenure in the market, AeBe’s earnings are currently dependent on a small number of transactions. KBRA expects improved earnings diversification as the company continues to execute on its business plan.”