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TMCNet:  A.M. Best Upgrades Ratings of Island Heritage Insurance Company Limited

[July 29, 2014]

A.M. Best Upgrades Ratings of Island Heritage 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 Island Heritage Insurance Company Limited (Island Heritage) (Cayman Islands). The outlook for both ratings has been revised to stable from positive.

The rating upgrades reflect Island Heritage's solid level of risk-adjusted capitalization, favorable operating results, experienced management team and regional market expertise. Also reflected in the upgrades is Island Heritage's affiliation with its parent, BF&M Limited, a Bermuda-domiciled publicly traded holding company. Island Heritage has parental support, and this affords the company access to the group's resources, including financial and investment management, information technology and reinsurance.

Solid underwriting results, along with investment income, have led to organic surplus growth in recent years, as well as a strong five-year average combined ratio. This has enabled Island Heritage to maintain more than adequate risk-adjusted capitalization for its current business profile. The management team at Island Heritage has extensive knowledge of each island and mantains effective risk management strategies. The company focuses on the unique needs of the Caribbean property owner and designs its programs to provide the depth of coverage needed. In addition, catastrophe risk is mitigated by Island Heritage's conservative reinsurance program, which protects the company's capital from the frequency and severity of events.


Partially offsetting these favorable rating factors is the geographic concentration of Island Heritage's business in the Caribbean, which exposes the company's operations to the effects of catastrophic events, the increasingly competitive landscape in its operating territories and local regulatory risk. Island Heritage, like other regional insurers, manages its exposure by maintaining an extensive reinsurance program to restrict losses from these inevitable natural events at a manageable level.

Island Heritage is well positioned at the current rating level. Factors that may lead to negative rating actions include a sustained decline in underwriting profitability, significant deterioration in risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), and a downgrade in Cayman Island's country risk tier rating.

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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