OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of M&C General Insurance Company Limited (M&C General) (Castries, St. Lucia). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect M&C General’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
M&C General’s balance sheet strength is underpinned by its risk-adjusted capitalization being assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). However, the company is relatively small with less than USD 10 million in equity, and it relies heavily on the strength of its reinsurers to manage its catastrophe exposure, minimize earnings volatility and protect surplus. The ratings benefit from the company’s operating performance, which has been better than average year in and year out compared with other companies writing similar lines of business in the Caribbean. Although the company has a concentration of risk in property and motor lines of business in St. Lucia, geographically it is less prone to hurricanes, which tend to take a more northerly track. Therefore, its operating performance has not been marred by severe weather events over the past five years.
M&C General operates in a limited, mature market, with little potential for organic growth. Management is well-established in this market, and effectively distributes its products through insurance brokers and on a direct basis. The ERM program has identified underwriting, investment and operational risks effectively, and focuses also on the regulatory and legal environment, as well as reserving, marketing and reputational risks. Moreover, M&C General’s affiliation with its ultimate parent, Goddard Enterprises Limited, one of the largest Barbados-domiciled conglomerates, gives the company access to financial and investment management and information technology.
AM Best anticipates that M&C General will continue to generate favorable earnings and maintain risk-adjusted capitalization at the strongest level.
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