OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Family Guardian Insurance Company Limited (Family Guardian). Concurrently, AM Best has removed from under review with developing implications and affirmed the Long-Term ICR of “bbb-” of FamGuard Corporation Limited (FamGuard) [BISX: FAM] (both domiciled in Nassau, Bahamas). Family Guardian is a wholly owned subsidiary of its publicly traded parent, FamGuard. The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Family Guardian’s balance sheet strength, which AM Best categorizes as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
These rating actions follow comprehensive assessments performed by the company of the financial impact to Family Guardian resulting from the devastation from Hurricane Dorian in September. While there was disruption to the company’s distribution, increased benefits and increases in policy lapses, the overall financial impact was limited. The most severe devastation of the storm occurred in the northern islands of Abaco and Grand Bahama where less than 15 percent of the company’s policyholders are located. The island of New Providence, where most of the population and businesses are located, was largely spared.
The balance sheet strength assessment reflects the very strong level of risk-adjusted capital, the absence of leverage, and good liquidity partly offset by the company’s limited investment options and high concentration of sovereign debt holdings. The company’s mortgage loan portfolio had very limited impact due to the relatively low number of loans in the hardest hit areas and property insurance coverage requirements. Operating performance remains strong, with minimal impact to operating earnings resulting from the storm. AM Best expects consistent positive net earnings to continue to support capital growth in the near term. The business profile assessment considers Family Guardian’s good market position in the Bahamas and creditworthy product offerings offset by its geographic concentration in the Bahamas. The company’s ERM framework and governance structure are appropriate for its risk profile.
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