AM Best has downgraded the Financial Strength Rating (FSR) to B (Fair) from B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb+” (Fair) from “bbb-” (Good) of Société Tunisienne de Réassurance (Tunis Re) (Tunisia). The outlook of the FSR has been revised to stable from negative, while the outlook of the Long-Term ICR is negative.

The Credit Ratings (ratings) reflect Tunis Re’s balance sheet strength, which AM business profile and marginal enterprise risk management (ERM).

Best assesses as very strong, as well as its adequate operating performance, limited.

The rating downgrades reflect a revision of AM Best’s assessment of Tunis Re’s ERM to marginal, due to an increase in economic and political risk in Tunisia over recent months, and the adverse impact that this is having on the company’s risk profile. Tunis Re is domiciled in Tunisia and holds over 95% of its invested assets in the country, in line with regulatory requirements.

The negative outlook on the Long-Term ICR reflects ongoing country risk pressures, which could lead to a deterioration of the company’s balance sheet strength.

Tunis Re’s balance sheet strength assessment reflects risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR).