AM Best Revises Outlooks to Negative for Polskie Towarzystwo Reasekuracji S.A.

AMSTERDAM–(BUSINESS WIRE)–#insurance–AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of Polskie Towarzystwo Reasekuracji S.A. (Polish Re) (Poland).

These Credit Ratings (ratings) reflect Polish Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). The ratings also reflect the lift Polish Re receives due to the support provided by its ultimate parent, Fairfax Financial Holdings Limited (Fairfax), in particular the explicit parental guarantee in place for Polish Re. In addition, Fairfax provides technical support in areas such as reserving, retrocession protection and investment management services.

The negative outlooks reflect pressure on Polish Re’s balance sheet strength assessment, following a trend of deteriorating risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), due to significant premium growth between 2019 and 2021 combined with a reduction in shareholders’ equity in 2021. As a result, the company’s BCAR assessment deteriorated to the strong level at year-end 2021 from very strong in 2020 and 2019, and strongest in 2018. Risk-adjusted capitalisation remains subject to volatility from growth levels and financial performance. AM Best will monitor the company’s risk-adjusted capitalisation, and negative rating actions could follow if BCAR is not maintained at a level supportive of the current balance sheet strength assessment.

Polish Re’s reserves exhibit an elevated level of volatility, stemming largely from motor third-party liability (MTPL) business in Poland, which negatively impacts the company’s balance sheet assessment. The company benefits from a conservative and liquid investment portfolio.

Polish Re’s tightened underwriting discipline in recent years has reversed the historically unstable operating performance trend, as evidenced by a five-year average combined ratio of 97.5% (2017-2021). The main source of historical volatility has been the MTPL portfolio, which was put into runoff in 2014. The company reported a net profit of PLN 16.2 million (USD 4.0 million) in 2021 (2020: USD 4.9 million), reflecting a 98.3% combined ratio, supplemented by investment income.

Polish Re benefits from its diversified portfolio offering and long-standing presence across Central and Eastern Europe and the Commonwealth of Independent States, as well as its position as the sole domestic reinsurer in Poland. Polish Re is well-diversified geographically, with operations spanning approximately 40 markets. Additionally, the company has significantly expanded its agriculture line of business in recent years. Despite its international presence, Polish Re’s business profile remains constrained by its lack of scale in any given market.

AM Best considers Polish Re’s ERM to be developed and appropriate for the company’s risk profile and operational scope.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


Morgane Hillebrandt
Financial Analyst
+31 20 308 5422

Victoria Ohorodnyk
Associate Director
+31 20 308 5432

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Al Slavin
Communications Specialist
+1 908 439 2200, ext. 5098

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