Although domiciled in Hawaii, most of the firm's business is in Japan
By Kenneth Araullo
Jan 17, 2024 Share
AM Best has assigned a financial strength rating of A- (Excellent) and a long-term issuer credit rating of “a-” (Excellent) to Hawaii-based PanAsia Reinsurance Inc. (PanAsia Re), accompanied by a stable outlook.
The ratings reflect PanAsia Re’s strong financial position, with AM Best recognizing the company’s balance sheet strength as very strong. This assessment is based on PanAsia Re’s highest level of risk-adjusted capitalization, as indicated by Best’s Capital Adequacy Ratio (BCAR), its prudent investment mix, and conservative loss reserves. These factors have been consistently demonstrated and projected over a five-year pro forma period, it stated.
In terms of operating performance, PanAsia Re has been rated as adequate. This rating is derived from the company’s profitability over the past three years. AM Best expects PanAsia Re to expand its business in alignment with its strategic business plan, including projections for the next five years.
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PanAsia Re’s business profile is considered limited due to its geographic focus and product range. The company specializes in writing small personal property damage, health, and accident policies, primarily for its diversified parent and affiliates. Currently, all its business operations are concentrated in Japan, although PanAsia Re is domiciled in Hawaii.
The company’s parent, Hikari Tsushin, Inc., is mainly involved in primary distribution through its various affiliate companies. The enterprise risk management (ERM) practices of PanAsia Re are considered appropriate for its risk profile. The company’s overall approach to underwriting, risk management, and risk tolerance is well-understood by its management, which regularly reviews vulnerabilities and manages risks within defined appetites and tolerances.
The ERM function at PanAsia Re is overseen by the head of risk, in collaboration with the company’s risk consultant, enterprise risk committee, audit committee, and investment committee. These groups meet frequently to discuss key business risks.
Additionally, PanAsia Re benefits from both implicit and explicit support from its parent company, Hikari Tsushin, Inc., it was stated. This support extends to financial flexibility and robust, enterprise-wide policies and procedures in areas such as risk management, corporate governance, and compliance, all of which contribute to the company’s overall stability and growth prospects.
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