NatRe gets stable outlook

MANILA, Philippines — The National Reinsurance Corp. of the Philippines (NatRe), the country’s sole professional reinsurer, has received a stable outlook but external headwinds and economic difficulties impact on its operations.

The Philippine Rating Services Corp. (PhilRatings) has assigned a rating of PRS A with a stable outlook for NatRe.

The rating means that NatRe has strong financial security characteristics, but is more likely to be affected by adverse business conditions compared to higher-rated insurance companies.

The stable outlook also means that the rating is likely to be maintained or to remain unchanged in the next twelve months.

Still, PhilRatings said NatRe is facing a number of external headwinds especially as growth in catastrophe losses has outpaced that of premium rates in the past three to five years.

Also weighing down on NatRe’s performance is the still elevated inflation rate as it directly affected the input costs incurred by its businesses.

Further, rising interest rates are also affecting NatRe’s performance, especially its investment assets.

While it has taken the necessary steps to mitigate the risks associated with challenges, these factors may continue to affect NatRe’s performance in the short- to medium-term,” PhilRatings said.

Nonetheless, the stable outlook took into consideration NatRe’s solid market franchise and its crucial role in the development of the domestic and regional insurance industry, sound investment portfolio, and adequate capital, among others.