Standard & Poor’s (S&P) has rated RGA Reinsurance of Australia’s life operations for the first time, giving it an AA- for financial strength and a stable outlook.

The ratings agency considers RGA Australia a core business of the US parent and has matched the rating of the two operations.

“RGA Australia has a strong stand-alone credit profile, reflecting the prospective strong life-industry growth in Australia, significant market share and conservative reinsurance arrangements,” S&P said in its report.

“Its creditworthiness benefits from the demand for its product being underpinned by the strongly growing nature of Australia’s life insurance market.”

S&P says RGA has a strong market share with 26% of the gross written premium and a gross annual premium income of about $600 million.

“RGA has a large distribution footprint, providing treaty reinsurance to 85% of life insurers operating in Australia,” the report said.

“We view RGA’s reinsurance arrangements as being conservative. The company has retro-ceded about one-third of its premiums to its parent.”

S&P says the outlook for the Australian operations look strong, but it has noted the tighter margins in the group life insurance market could have an impact on the reinsurer’s bottom line. This business makes up 60% of RGA’s gross written premium in Australia.