Trust Re seeks return to rating as rebuild continues – Albaharna GAIF34 interview

Trust Re’s CEO Yassir Albaharna shared his priorities with GR, including getting the reinsurer’s credit ratings back again, to be able to return to former business that has been unavailable to the firm for several years.

He cited 2023 as “a good year for us” and for the reinsurance market as a whole, with the hard market “bearing fruit” as constrained capacity and attractive rates provided opportunities for reinsurers.

Treaty Re is a family-owned Bahrain-based reinsurer of Afro-Asian treaty and facultative reinsurance, but its reinsurance business has been heavily constrained by its rating issue in recent years.

Albaharna was speaking in Muscat at the 34th General Arab Insurance Federation (GAIF) conference on 18-21 February; Oman played host to more than two thousand delegates for the GAIF34.

Albaharna indicated that he expects outstanding issues about the Bahraini reinsurer’s shareholding to be resolved soon, in order for Trust Re to continue to rebuild its portfolio.

“We are on the way to resolving these issues, which are public knowledge, relating to the shareholding of Trust Re, and we expect finalisation of these anytime during this quarter,” he said.

“The plan is to embark on a rating now. We used to enjoy an ‘A’ and ‘A-’ rating before. To get this back will be a challenge, but I believe this is important to commence the journey and to have the necessary ratings,” Albaharna added.

Albaharna joined Trust Re became group CEO in 2021, after first serving as vice chairman from 2019. He joined in the period following rating downgrades in 2018, after corporate governance failings led to long delays in submitting its regulatory filings for 2017.

Corporate governance problems related to the company’s ownership, requiring a period of establishing transparency and accountability in his early period with the firm, as well as adjusting to a much smaller book of business.

“We operate 80% of our portfolio through two fronting arrangements. These are done with the knowledge of the clients and brokers and quota share 100% of that business back to Trust Re. For our other business we write it unrated, and these clients are fine with this. This is a short term solution, while we fix our internal shareholder issue,” he said.

The market is characterised by a shortage of capacity providing reinsurers with opportunities, he described, for which Albaharna is happy to scout across the region for well-priced business.

“The reinsurance market has hardened internationally, to a lesser degree regionally, but still there is a hardening and today we are able to access organic growth and a lot of the business because of a shortage of capacity. We have people who are not interested to do this business anymore, whereas we are homegrown, we are here within the region, and we are serving it in the market,” he said.

Trust Re traditionally started out as a facultative energy underwriter, he noted. Today, some 90% of the reinsurer’s book is non-life business, and of that, roughly half is fac and half is treaty business.

“Because of the rating issue, it will be easier to grow treaty than facultative. However, our preference is more for fac than treaty, because we can price fac business better and there are less accumulation risks in fac than treaty,” he revealed.

“It will take a little bit of time, but there is no magic number,” he continued, adding that the regional opportunities provided by projects such as Saudi Arabia’s 2030 growth plans mean there will be an influx of construction, engineering and property business in the medium term.

“We are all in search of a balanced portfolio, in terms of composition between treaty and facultative, across lines of business, geographical balance, and whether it’s over five or ten years, a good reinsurer should have a good mix, which is an issue of capital allocation and also of technical expertise,” Albaharna added.