AM Best Upgrades Issuer Credit Rating of Dunav-Re a.d.o

AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to "bbb+" (Good) from "bbb" (Good) and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Dunav-Re a.d.o (Dunav-Re) (Serbia). The outlook of the Long-Term ICR has been revised to stable from positive, while the outlook of the FSR is stable.

The Credit Ratings (ratings) reflect Dunav-Re's balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. The ratings also factor in rating lift from Dunav Re's parent company, Dunav osiguranje a.d.o (Dunav Insurance).

The upgrade of the Long-Term ICR reflects rating lift applied to Dunav-Re's ratings, which considers the company's strategic importance to its parent company, Dunav Insurance. This reflects Dunav-Re's track record of supporting the group's strategy, providing reinsurance support to Dunav Insurance and its subsidiaries. At year-end 2025, Dunav Re contributed one-fifth of the group's consolidated gross written premium. Dunav-Re is the leading reinsurer in Serbia and writes a growing portfolio of internationally sourced business. Dunav Insurance's creditworthiness has improved in recent years, and the parent company is expected to provide prompt and sufficient support to Dunav-Re, if needed.

Dunav-Re's balance sheet strength assessment is underpinned by its risk-adjusted capitalisation assessed at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). The assessment considers the company's solid internal capital generation in recent years and good financial flexibility as a subsidiary of Dunav Insurance. Partially offsetting rating factors include Dunav-Re's high exposure to Serbia's financial system, with all of its investments held domestically, as well as its small capital base on an absolute basis, which increases the sensitivity of its risk-adjusted capitalisation to potential shocks. Dunav-Re is also dependent on retrocession to manage domestically sourced business; however, the associated risks are mitigated partly by a stable retrocession panel of excellent credit quality.

Dunav-Re has a track-record of strong operating performance, evidenced by a five-year (2021-2025) weighted average return on equity ratio of 21.0%. Despite rapid growth of its international book of business in recent years, the company has maintained robust underwriting performance, evidenced by a five-year (2021-2025) weighted average combined ratio of 84.7%. AM Best expects prospective operating performance to be supported by Dunav-Re's selective underwriting and stable investment income.

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 www.ambest.com

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