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TMCNet:  A.M. Best Upgrades Ratings of Caribbean Alliance Insurance Company Limited

[July 25, 2014]

A.M. Best Upgrades Ratings of Caribbean Alliance Insurance Company Limited

OLDWICK, N.J. --(Business Wire)--

A.M. Best has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the issuer credit rating to "a" from "a-" of Caribbean Alliance Insurance Company Limited (CAIC) (Antigua and Barbuda). The outlook for both ratings has been revised to stable from positive.

The ratings upgrade reflects CAIC's superior risk-adjusted capitalization, historically consistent and profitable operating results and conservative management philosophy. Also reflected in the upgrade are the company's effective risk management procedures, which include its comprehensive reinsurance program used to mitigate CAIC's exposure to natural catastrophes that are prevalent in the region.

CAIC has experienced significant organic surplus growth driven by robust underwriting results and steady interest income earned from the company's conservative investment portfolio. CAIC's risk-adjusted capitalization and operating performance metrics consistently place the company toward the top of its Caribbean peer group. The ratings are further bolstered by CAIC's strong maret profile and its management team's extensive knowledge of the territories in which the company operates.


These positive rating factors are partially offset by CAIC's geographic concentration in the Caribbean and its continued exposure to catastrophe risks, making the company dependent on reinsurance for property lines of business. Furthermore, insurance market conditions in the Caribbean have been soft and increasingly competitive, and difficult overall economic conditions throughout most of the Caribbean have persisted, negatively impacting insurance growth and consumption.

A.M. Best believes that CAIC is well positioned at its current rating level. Negative rating actions could occur if Antigua's country risk tier is downgraded or if the company makes a material deviation from its conservative growth trajectory. A significant decline in risk-adjusted capitalization or operating performance also could add negative rating pressure.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


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