OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Insurance Corporation of Barbados Limited (ICBL) (Barbados). The outlook for both ratings is stable.
The ratings reflect ICBL’s solid capitalization, leading market presence in its domestic market, favorable earnings in recent years and its affiliation with Bermuda-based BF&M Limited, its majority owner, which is publicly traded on the Bermuda Stock Exchange. ICBL is publicly traded on the Barbados Stock Exchange.
ICBL is the leading property/casualty insurer in the Barbados market. For the most part, ICBL has achieved favorable underwriting results in recent years through prudent risk selection and underwriting discipline. Underwriting profitability has been augmented by consistent levels of investment income, and this has enabled the company to continue to enhance its capitalization. In addition, ICBL’s affiliation with BF&M Limited affords it access to the organization’s resources, including financial services, investment management expertise and information technology.
Partially offsetting these positive rating factors are the geographic concentration of ICBL’s business in Barbados and the increasingly competitive market in which it operates. Furthermore, concerns persist relative to a prolonged economic contraction, the country's widening fiscal deficit and its declining fiscal reserves as reflected in the downgrading of the sovereign ratings of Barbados. ICBL, like other regional insurers, has significant exposure to catastrophic losses. The company manages this risk through the utilization of reinsurance to limit its catastrophe exposure to a manageable level and protect its surplus against frequency of events.
While the ratings of ICBL are stable, factors that could contribute to rating enhancement include sustained improvement in underwriting performance and a continued strong overall profitability. Factors that could lead to negative rating actions include significant loss of market share, continued decline in the company’s underwriting profitability and substantial deterioration in risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR).
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.
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