AM Best Affirms Credit Ratings of FAIR Oil & Energy Insurance Syndicate

APRIL 08, 2026 10:44 AM (EDT)

AM Best Affirms Credit Ratings of FAIR Oil & Energy Insurance Syndicate

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FOR IMMEDIATE RELEASE

LONDON - APRIL 08, 2026 10:44 AM (EDT)
AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of "bbb" (Good) of FAIR Oil & Energy Insurance Syndicate (the Syndicate) (Bahrain). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect the Syndicate'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 Syndicate is one of four reinsurance vehicles formed by the Federation of Afro-Asian Insurers and Reinsurers (FAIR), with a remit to underwrite energy business. Members are drawn from participants of FAIR, who subscribe to the Syndicate's units of capacity. As at year-end 2025, the Syndicate consisted of 21 members from across the Africa, Middle East and Asia regions. Whilst unique in its legal structure, the Syndicate operates like a traditional reinsurer, providing capacity and expertise to its members as well as third-party cedants.

The Syndicate's balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is comfortably at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). AM Best expects the Syndicate's BCAR scores to remain at this level prospectively, supported by robust capital generation, a conservative investment portfolio and a retrocession panel of good financial strength. The permanence of capital is a risk for the Syndicate; however, this is mitigated by stringent controls on surplus distribution and a long withdrawal notification period, as agreed by the Syndicate's general assembly. Between 2015 and 2025, 100% of surplus generated by the Syndicate was retained.

The Syndicate reported several large losses in 2025 (based on preliminary financials), contributing to a poor underwriting result. Such low frequency, high severity losses are expected given the Syndicate's risk profile. The Syndicate has a track record of robust underwriting performance, demonstrated by a four-year (2022-2025) weighted average net/net combined ratio of 78.6%, as calculated by AM Best. Investment returns, in the current high-interest rate environment, continue to positively contribute to overall profitability.

Although limited in size, the Syndicate benefits from a niche business profile, having built a strong reputation within the energy insurance market. Whilst concentrated by line of business, The Syndicate benefits from growing geographical diversification across its portfolio. The Syndicate's stable member base provides it with good access to energy risks across the Afro-Asian territories, supplemented by business written on the open market across the region.

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 Activityweb 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 (BCR), Best's Performance Assessments (PA), Best's Preliminary Credit Assessments (PCA) 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 specializing 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.