The ratings reflect the substantial amount of support Top Layer receives from its co-owners,
Since Top Layer’s inception in 1999, it has generated outstanding operating results, which are due to the property catastrophe underwriting expertise of RenRe, combined with very few catastrophes significant enough to impact the programs written in Top Layer’s core markets. Top Layer’s business scope is limited to the assumption of high excess layers of non-U.S. property catastrophe risks underwritten on a global basis, and is best viewed over a long-term time horizon. Despite the company’s first underwriting loss ever in 2010, which was followed by an underwriting loss again in 2011, Top Layer has performed in line with how it was designed.
Top Layer maintains a modest amount of on-balance sheet capital relative to the high excess layers of property catastrophe risks it assumes. The company’s capital profile is rather unique from a qualitative and quantitative perspective, but fundamentally, Top Layer offers clients credit security in the layers of a reinsurance program where credit security is paramount. Top Layer’s capitalization is enhanced through various contractual obligations, resulting in substantial capital support and reinsurance protection from
Factors that could result in an upgrading of Top Layer’s ratings or a positive outlook are a continuation of its very long-term profitability and a continuation of support from its owners. Factors that could lead to a downgrading of the company’s or revision of its outlook to negative include an increased frequency of losses that would cause
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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