AM Best has affirmed the financial strength rating of A (Excellent) and long-term issuer credit rating of “a” (Excellent) of Nectaris Re Ltd, the operating subsidiary of Nectaris Holdings Ltd, both of which are domiciled in Bermuda.

The outlook of these credit ratings is stable.

The agency said the ratings reflect Nectaris Re’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

AM Best said the company’s business strategy is to retrocede all of its business to Horseshoe Re II Limited segregated accounts company with cells that are funded by insurance-linked securities funds managed by Leadenhall Capital Partners LLP.

Leadenhall, which has a mutual co-operation agreement with Nectaris Re, has had a book of business built since its inception in 2008.

The business written via both Lloyd’s Syndicate 2001 (managed by MS Amlin Underwriting Ltd) and MS Amlin AG (both whose ultimate parent is MS&AD), accounts for the majority of total limits ceded to Nectaris Re, and is 100 per cent retroceded to Horseshoe Re II on a fully collateralised basis, AM Best said.

Lloyd’s Syndicate 2001 and MS Amlin AG’s ceded business, is collaterised at the 1-in-1,000 aggregate exceedance probability (AEP) return period while retaining the associated tail risk.

Nectaris also established a fronting relationship with Allianz Risk Transfer (Bermuda) Limited in 2022.

AM Best said Nectaris intends to increase its open market business to take advantage of the hard market with limited impact on its tail risk and capital.

All open market business ceded to Horseshoe Re II is collateralised at the 1-in-2,000 AEP return period, with the associated tail risk retained by Nectaris Re.

Collateral provided by Horseshoe Re II, which is comprised of cash and highly rated short-term assets, is held in trust accounts for the benefit of Nectaris Re.