LONDON–(BUSINESS WIRE)–AM Best revised the outlook from stable to positive and affirmed the financial strength rating of B+ (good) and the long-term issuer credit rating of “bbb-” (good) of Dunav-Re ado (Dunav-Re ) (Serbia).

The ratings reflect the strength of Dunav-Re’s balance sheet, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate management of business risks.

The revision to the outlook from stable to positive primarily reflects Dunav-Re’s solid operating performance and the expectation that this will continue.

AM Best expects Dunav-Re to return good underwriting profitability in the short to medium term, consistent with its recent experience. The company’s international business has grown rapidly, and although it is performing well, its performance is slightly lower than that of the domestic business. Dunav-Re’s results remain sensitive to potential volatility due to the company’s exposure to catastrophic events.

Dunav-Re’s risk-adjusted capitalization remains at the highest level, as measured by Best’s capital adequacy ratio (BCAR), supported by capital contributions from its ultimate parent company, Dunav osiguranje ado (Dunav Insurance). AM Best expects the future growth of the business to be supported by internal capital generation and financial support from the parent company. Dunav-Re is somewhat dependent on retrocession to manage domestic business; however, the associated credit risk is mitigated in part by the excellent credit quality of the company’s retrocession panel. Compensating factors in assessing the strength of the balance sheet include the company’s high exposure to the Serbian financial system and its weak capital base.

Dunav-Re is a multi-line reinsurer operating from Serbia. It occupies a dominant position in its local market, where it conducts the majority of its business, Dunav Insurance being its largest ceding company. The company is active outside its home market, where it issued around two-thirds of its net written premiums in 2021.

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