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AM Best Upgrades Credit Ratings of Black Gold Re Limited

EC
  • AM Best upgraded Black Gold Re Limited's Financial Strength Rating to A- and Long-Term Issuer Credit Rating to a- from B++ and bbb+ respectively.
  • The outlook for these ratings shifted from positive to stable.
  • The upgrade reflects BGRe's strongest balance sheet strength, adequate operating performance, neutral business profile, & appropriate enterprise risk management.
  • BGRe maintains a sustained trend of risk-adjusted capitalization at the strongest level with a comfortable buffer, supported by strong internal capital generation.
  • The company's capital position is reinforced by efficient capital management, a conservative asset-liability management framework, & low underwriting leverage.
  • BGRe made an initial dividend payment to its parent Ecopetrol in 2025 & anticipates future distributions aligned with capital management goals without materially weakening the balance sheet.
  • BGRe is a captive reinsurer for Ecopetrol S.A., an energy company 88.5% owned by the Colombian government, providing reinsurance through a dual insurance program structure.
  • The company demonstrates a solid track record of profitable underwriting with sustained low combined ratios, supported by disciplined loss ratio management & a robust retrocession program.
  • While BGRe benefits from Ecopetrol's industry relevance, its business profile is considered neutral due to portfolio concentration in Colombia.
  • Negative rating actions could occur following material deterioration in liquidity, leverage, or capitalization, or if Ecopetrol's credit profile weakens.
  • Positive rating actions could result from sustained improvements in BGRe's operating performance, although this is not expected in the medium term.