AM Best has affirmed the Financial Strength Rating (FSR) of B (Fair) and Long-Term Issuer Credit Rating (Long-Term ICR) of “bb” (Fair) of Société Tunisienne de Réassurance (Tunis Re) (Tunisia). The outlook of these Credit Ratings (ratings) is negative.

The ratings reflect Tunis Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM). The negative outlooks reflect ongoing country risk pressures in Tunisia, which could lead to further deterioration in the company’s balance sheet fundamentals and in its ability to manage the heightened risk environment in which it operates.

Tunis Re’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which was at the strongest level at year-end 2023. This assessment factors in the company’s conservative investment portfolio by asset class, and its concentration in Tunisia, where the company holds over 95% of its invested assets in line with regulatory requirements, which weighs on asset quality. Heightened economic and political risk in Tunisia has driven significant increases in required capital for investment risk since 2020, materially reducing the margin that Tunis Re holds in excess of the minimum required for the strongest BCAR assessment level.