AM Best Assigns Credit Ratings to The Hand-in-Hand Mutual Fire Insurance Company Limited and Hand-in-Hand Mutual Life Assurance Company Limited

MEXICO CITY--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of B++ (Good) and Long-Term Issuer Credit Ratings of “bbb+” (Good) to The Hand-in-Hand Mutual Fire Insurance Company Limited (HIHF) (Guyana) and Hand-in-Hand Mutual Life Assurance Company Limited (HIHL). Both entities are referred to as Hand-in-Hand Group. The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings of HIHF reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings of HIHL reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

HIHF is the oldest insurance company in Guyana, established in 1865, and is the second-largest carrier in the country’s insurance industry. The company writes property and casualty lines of business with a market share of approximately 19.8%. As of December 2021, its business portfolio was composed mainly by fire and motor coverages, although it also operates heavily in the accidents and liability market.

HIHL was incorporated in 1966, and as a mutual company, it is owned by policyholders with a small amount of preferred shares issued to HIHF. The company is engaged predominantly in underwriting group health and life insurance, with a significant portfolio of ordinary life and annuities. Its market share is estimated at 22.5%. Overall, the Guyana insurance market experienced growth of 16.9% in 2021, and totaled USD 63 million.

The companies’ balance sheet strength assessment of very strong reflects each of their stable capital bases, with responsible asset-liability management and proper reinsurance coverages. Investment risk is an important component of the required capital, due to the limited available securities in the market in which both companies operate. As mutual companies, the quality of the capital is very good because of its stability; main outflows come from triennial profit-sharing with entitled policyholders.

Operating performance at both companies is considered adequate with manageable loss and benefits paid ratios; nevertheless, the companies have seen some volatility in premium growth and reported bottom-line results, although results in the most recent five-year period have been positive. The companies share policies and procedures and perform stress tests as part of their ERM, and are continuously strengthening risk management capabilities.

The stable outlooks for HIHF and HIHL reflect the expectation that the companies will maintain their very strong balance sheet assessment, supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR).

Positive rating action for HIHF and HIHL could take place if the companies continue their positive trend in risk-adjusted capitalization while building up their capital bases in a consistent manner. Conversely, negative rating action for HIHF and HIHL could occur if there is a significant decline in the companies’ capital bases or if operating performance experiences deterioration over time from sustained underwriting or net losses.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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