AM Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” (Good) from “bbb-” (Good) of Dunav-Re a.d.o. (Dunav-Re) (Serbia). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect Dunav-Re’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. In addition, the ratings reflect a neutral impact from Dunav-Re’s ownership by Dunav osiguranje a.d.o. (Dunav Insurance).

The rating upgrades reflect the company’s robust operating performance in recent years, as evidenced by a five-year (2019-2023) weighted average return-on-equity ratio of 18.8%. Despite the rapid growth of international business in recent years, Dunav-Re has maintained a record of favourable underwriting performance, reporting a five-year weighted average combined ratio of 84.0% over the period. Operating performance is expected to remain supported by prudent underwriting and positive investment results.

Dunav-Re’s risk-adjusted capitalisation remains comfortably at the strongest level, as measured by Best’s Capital Adequacy Ratio. AM Best expects the company’s future business growth to be adequately supported by internal capital generation. Dunav-Re is dependent on retrocession to manage domestically sourced business; however, the credit risk associated with this is mitigated partially by the excellent credit quality of the company’s retrocession panel. Offsetting factors in the balance sheet strength assessment include Dunav-Re’s high exposure to Serbia’s financial system and its capital base, which whilst growing, remains small by global standards.

Dunav-Re is a multiline reinsurer domiciled in Serbia. It has a dominant position in its local market, where it generates the majority of its business, with Dunav Insurance being its largest cedant. The company is active outside of its domestic market and expects internationally sourced business to continue to contribute positively to overall growth in the medium term.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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