Insurance
Home›Insurance›Reinsurance›AM Best upgrades Milli Re ratings after capitalisation…
AM Best upgrades Milli Re ratings after capitalisation improves
AM Best lifted Milli Re’s financial strength rating to B- from C++, citing higher risk-adjusted capitalisation measured by BCAR and a positive rating outlook.
AM Best has upgraded the financial strength and credit ratings of Milli Re, the Türkiye-based reinsurer, after it said the company’s risk-adjusted capitalisation and broader balance sheet fundamentals improved.
The agency raised Milli Re’s Financial Strength Rating, or FSR, to B- (Fair) from C++ (Marginal), and increased its Long-Term Issuer Credit Rating to bb- (Fair) from b (Marginal). AM Best also set the outlook for the FSR to positive, and assigned a positive outlook for the long-term issuer credit rating.
AM Best said the upgrades reflect an assessment of Milli Re’s balance sheet strength as adequate, along with adequate operating performance, a neutral business profile, and only marginal enterprise risk management. It linked the change largely to stronger fundamentals including improved risk-adjusted capitalisation, supported by earnings retention and greater stability in Türkiye’s economic conditions, and it expects the balance sheet strength to continue improving in the short to medium term.
The ratings agency noted that Milli Re’s earnings have shown strong consistency, with consolidated and unconsolidated return on equity averaging more than 40% between 2021 and 2025, while also emphasizing that Türkiye’s very high inflation since 2021 remains a key backdrop. AM Best said investment income has been important, helped by Türkiye’s high interest-rate environment, and it pointed to foreign exchange gains, while also flagging underwriting as a pressure point, citing five-year weighted average combined ratios of 117% consolidated and 149% unconsolidated, with effects from inflation and Turkish lira depreciation.