OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” of Gulf Insurance Limited (Gulf) (Trinidad and Tobago). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Gulf’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The strong level of balance sheet strength is derived from very strong risk-adjusted capitalization, adequate liquidity and loss reserves, and is supported by positive earnings. However, the assessment of the balance sheet is limited by the company’s small size. In addition, Gulf is highly dependent upon quality third party reinsurers to protect shareholder equity from catastrophic loss.
Gulf’s business profile is considered limited due to its significant concentration of property and motor risks in its domestic Trinidad and Tobago market. This market is considered to be very mature and highly competitive, providing the company with limited opportunities for organic growth. Gulf is a long-standing insurer, having operated in this market for over 45 years, and has achieved a high level of brand recognition. As such, its risk management capabilities are deemed to be appropriate, although a formal ERM program continues to evolve.
Although slightly diminished, concerns persist relative to the macroeconomic and fiscal challenges faced by the ultimate parent, Assuria N.V. (Assuria) (Suriname), and the potential financial strain that could be imposed on Gulf’s balance sheet in the event that Assuria is impacted negatively.
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