According to AM Best, the recovery of air travel and new product efforts will be the primary drivers of Tune Protect Re's (TPR) moderate revenue growth and healthy operating earnings over the medium term.
According to a review, the global credit rating agency, TPR's operating performance is "sufficient." Even though its sales and operating earnings suffered because to the COVID-19 pandemic, the company has been able to increase its premium base through global growth and new business partners in recent times.
According to AM Best, the performance measures are still dependent on the company's capacity to establish and uphold lucrative contracts with distribution partners.
rating confirmation
TPR's B++ (Good) Financial Strength Rating and "bbb" Long-Term Issuer Credit Rating have been confirmed by AM Best (Good). These credit ratings have a "Stable" outlook.
The ratings take into account TPR's satisfactory operating performance, constrained business profile, and effective enterprise risk management. AM Best rates TPR's balance sheet strength as strong.
sheet of balances
TPR's risk-adjusted capitalization is likely to remain at the highest level over the medium term, as defined by Best's Capital Adequacy Ratio, which supports the company's evaluation of its balance sheet strength (BCAR).
The company, according to AM Best, has a moderate risk investment strategy and holds most of its investment assets in unit trust funds. The underlying assets are primarily fixed-income securities with high credit quality. TPR reported a net investment yield of 2.9% over the past five years (2017-2021).
The company's relatively small absolute capital base ($36m at year's end 2021) compared to peer reinsurers is one partial offsetting balance sheet factor. This makes capital adequacy more volatile in stressed scenarios.
After evaluating the consolidated risk-adjusted capitalization of TPR's parent group, Tune Protect Group, AM Best's analysis of balance sheet strength also takes into account the neutral holding company impact (TPG).
company profile
Due to TPR's status as a specialized reinsurer with a focus on travel-related insurance products, AM Best rates its business profile as limited. TPR works with business partners, such as airlines and travel agencies, to support and distribute policies using TPG's proprietary technology platform. The company is anticipated to speed up its diversification into new business partners, including lifestyle and supplemental healthcare products, over the medium term.
