AM Best Revises Issuer Credit Rating Outlook to Positive for RF&G Insurance Company Limited; Affirms Credit Ratings

MEXICO CITY--(BUSINESS WIRE)--AM Best has revised the Long-Term Issuer Credit Rating (Long-Term ICR) outlook to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term ICR of “bbb” (Good) of RF&G Insurance Company Limited (RF&G) (Belize). The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect RF&G’s 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).

RF&G is the leading property/casualty insurer in Belize, with over a 50% market share in this segment. The company is wholly owned by its holding company, G.A. Roe & Sons Limited (ROE), which operates as a finance, management and investment company. RF&G was established in Belize in 1964, when the insurance operation was called Horncastle (British Honduras) Ltd. In 2005, ROE acquired Regent Insurance and merged the operations, resulting in a 2008 name change to RF&G Insurance Company Limited. As of year-end 2021, RF&G’s business portfolio was composed predominantly by fire (66%) and motor (22%), with the remainder in casualty and a mix of marine, aviation, bonds and title (12%).

AM Best considers RF&G’s balance sheet to be very strong, with reported surplus showing considerable growth due to sustained profitability. In addition, risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), reflects the company’s conservative risk appetite, and is supported by an adequate reinsurance program. Nevertheless, the volume of its capital, gross exposure to catastrophe risk and reinsurance dependence limits AM Best’s view of the company’s balance sheet strength. Additionally, AM Best considers RF&G’s ERM practices as appropriate, given the company’s comprehensive and appropriate risk framework and the low complexity of its operations.

AM Best considers the company’s operating performance, as of December 2021, to be adequate. However, the positive outlook on the Long-Term ICR points to RFG’s ability to perform profitably across difficult business cycles while maintaining a positive trend in underwriting quality. For the remainder of 2022 and into 2023, there could be opportunities to grow the business as the company deploys its strengthened underwriting capabilities.

Macroeconomic factors in Belize continue to be a key concern; nevertheless, resumed levels of tourism activities has improved access to U.S. dollars in the financial system and the credit quality of eligible investments to cover insurance obligations. AM Best considers RF&G’s business profile as neutral, as management has worked proactively with financial authorities, regulators and business partners, including reinsurers, to face any potential adversities resulting from current economic conditions.

Positive rating actions could take place if the RF&G continues to experience profitable underwriting results and risk-adjusted capitalization remains at supportive levels for its ratings. Negative rating actions could take place if risk-adjusted capitalization decreases due to volatility in net results or from capital outflows. Negative rating actions also could occur if Belize’s macroeconomic environment pressures the financial flexibility of the company.

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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