OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of BF&M Life Insurance Company Limited (BF&M Life), BF&M General Insurance Company Limited (BF&M General) and Island Heritage Insurance Company, Ltd. (Island Heritage) (Cayman Islands). Furthermore, A.M. Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Insurance Corporation of Barbados Limited (ICBL) (Barbados). A.M. Best also has affirmed the Long-Term ICR of “bbb” of the parent company, BF&M Limited (BF&M). All companies are domiciled in Hamilton, Bermuda, unless otherwise stated. The outlook of these Credit Ratings (ratings) is stable.
The ratings of BF&M Life, BF&M General and Island Heritage reflect the companies’ balance sheet strength, which A.M. Best categorizes as very strong, as well as their adequate operating performance, neutral business profile and appropriate enterprise risk management.
The ratings of BF&M Life, BF&M General and Island Heritage are supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio. The quality of the group’s capital has been driven by a trend of positive net gains, as well as support from its diversified product portfolio and geographic operations. The group’s capital position and earnings were negatively affected by a sizeable write-down of a large commercial mortgage loan and subsequent need for reserve strengthening during 2017.
While A.M. Best has some concerns regarding BF&M’s low-liquid Bermuda commercial mortgage holdings, the overall exposure to this asset class has declined over the years. The core results in 2017 added a favorable offset to losses incurred from property business in the Cayman Islands, and BF&M’s use of reinsurance and its approach to risk management also contributed to mitigating financial impact to the group.
The ratings of ICBL reflect its balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. BF&M is the majority shareholder of ICBL, whose shares are traded on the Barbados Stock Exchange. ICBL benefits from its strategic affiliation with BF&M and the implied support that could be provided if needed. The ratings also acknowledge ICBL’s significant geographic concentration of its business in Barbados and considerable exposure to below investment-grade government bonds; the Barbados government is currently evaluating alternatives with the International Monetary Fund for financing its debt burden.
This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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