AM Best has placed the credit ratings of Bermudian-based Canopius Reinsurance Ltd under review with positive implications in light of the proposed takeover of its parent company by Samsung Fire & Marine Insurance.

The ratings agency said the move was about the potential financial and operational benefits Canopius could gain from becoming part of a much-larger insurer with greater financial strength.

Canopius Re’s financial strength rating of A- (Excellent) and long-term issuer credit rating of “a-” (Excellent) are affected by the review. The ratings are not an upgrade, but AM Best said it would assess the company’s future plans after the deal closes.

Samsung Fire & Marine agreed this week to acquire the remaining 60 per cent stake in Canopius Group alongside funds managed by KKR and Korea Investment Corp.

The South Korean insurer would lift its holding from 40 per cent to 80.6 per cent, giving it control of the specialty re/insurer. KKR would hold 12.1 per cent and Korea Investment Corp 7.3 per cent, subject to adjustments at closing.

AM Best said the ratings would probably remain under review until the deal had completed and it had carried out a detailed examination of Canopius’s business plans.

Canopius Re is a Bermuda Class 4 reinsurer and one of several platforms through which the group writes specialty re/insurance business worldwide. Canopius also underwrites through Lloyd’s Syndicate 4444 and its US surplus-lines insurer.

The Bermuda company was granted its Class 4 licence by the Bermuda Monetary Authority in 2021, expanding its ability to write third-party risk and increasing the group’s commitment to the island’s reinsurance market.

In a separate statement, AM Best said Samsung Fire & Marine’s own A++ financial strength rating and “aa+” issuer credit rating were unchanged after the acquisition announcement.

The agency said it did not expect the deal to weaken Samsung Fire & Marine’s balance-sheet strength, while the acquisition would add to its international diversification and give it more exposure to specialty re/insurance.