Kelvin Re kept under review by AM Best after Cowen acquisition


Having been acquired by New York headquartered financial services group Cowen, the Guernsey based, previously Credit Suisse Insurance Linked Strategies supported reinsurance company Kelvin Re Limited remains under review, from a ratings perspective, given uncertainty related to its parent and the eventual strategy it will take.

kelvin-re-logoThis is according to rating agency AM Best, who said today it is maintaining the under review with developing implications status of Kelvin Re’s financial strength and issuer credit ratings.

Kelvin Re previously took its financial support through insurance-linked securities (ILS) investors and funds under the management of Credit Suisse Asset Management’s specialist ILS investment unit, solely backed by investments made by the Abu Dhabi Investment Council, a sovereign wealth investor with a liking for reinsurance-linked returns.

Having been shuttered and gone into a run-off process after suffering heavy catastrophe losses through recent years, the news eventually broke that Kelvin Re had been sold to Cowen.

AM Best had downgraded Kelvin Re Limited’s Financial Strength Rating (FSR) to B+ (Good) from A- (Excellent) and Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb-” (Good) from “a-” (Excellent) at that time.

In an update today, AM Best said it maintains the under review with developing implications status of the ratings, after the announcement on August 2nd 2022 that Kelvin Re’s new parent, Cowen Inc. (Cowen), is being acquired by The Toronto-Dominion Bank (TD), a Toronto-based multinational banking and financial services group.

That transaction is due to close in the first quarter of 2023, but adds some uncertainty over the future for Kelvin Re as well.

AM Best explained, “The ratings are under review with developing implications due to uncertainty regarding the future strategy of Kelvin Re and its potential relationship with TD.

“The ratings are expected to remain under review until the transaction has closed and AM Best has assessed the impact of the potential change in ultimate ownership on the company’s credit fundamentals, taking into account prospective business plans.”

In addition, AM Best said that no business plans have been submitted for Kelvin Re at this time, so the rating agency still has uncertainty over exactly how Cowen and its new parent TD intend to use the Guernsey based reinsurance vehicle going forwards.

At this time we still don’t have any visibility of plans for Kelvin Re, although the reinsurers name has come up in conversations with sources of late, so some form of operations appear to be planned and being set out.

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