OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit ratings of “a-” of Bahamas First General Insurance Company Limited (BFG) (Nassau, Bahamas) and Cayman First Insurance Company Limited (CFI) (Cayman Islands). The outlook for all ratings is stable. Both companies are subsidiaries of Bahamas First Holdings Limited (BFH) (Nassau, Bahamas).
The ratings of BFG reflect its continued excellent capitalization, historically favorable operating performance and leading market share in the Bahamian market. These factors are supported by BFG’s local market expertise and conservative catastrophe reinsurance program. Partially offsetting these positive rating factors are BFG’s geographic concentration and its dependence on reinsurance as a result of its catastrophe exposure to hurricanes in the Caribbean. Additionally, there is increased competition within the Bahamian insurance market and lingering economic and fiscal concerns about the Bahamas’ overall economic outlook.
The ratings of CFI recognize its improved overall results and capitalization, as well as its expertise in the Cayman market. CFI’s ratings also reflect improvements in the company’s health segment and the effect of litigation from prior ownership, which has negatively impacted CFI’s earnings and capitalization.
While BFG’s ratings are stable, positive rating actions could occur if the company exhibits sustainable long-term improvements in underwriting and overall results while maintaining its solid capitalization levels. Factors that may lead to negative rating actions include protracted adverse underwriting and overall results that are exacerbated by a large catastrophic event and a significant decline in risk-based capitalization.
While CFI’s ratings are stable, factors that may lead to positive rating actions include continued favorable underwriting and overall profitability, significant surplus growth and improvement of risk-adjusted capitalization. Factors that may lead to negative rating actions include deterioration in CFI’s underwriting and overall results, adverse results in its health segment and deterioration in its risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio.
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.
Key insurance criteria reports utilized:
- Catastrophe Analysis in A.M. Best Ratings
- Evaluating Country Risk
- Rating Members of Insurance Groups
- Risk Management and the Rating Process for Insurance Companies
- Understanding Universal BCAR
This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.
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