AM Best Affirms Credit Ratings of TDC Insurance Company Limited

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-” (Excellent) of TDC Insurance Company Limited (TDCIC) (St. Kitts and Nevis). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TDCIC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

TDCIC maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which continues to support its balance sheet strength assessment. While total capital and surplus remains relatively modest, the organization has generated capital and surplus growth annually over the last five years, driven by favorable net earnings. TDCIC does have a history of paying dividends to its parent entity, TDC Group Limited (TDC Group), with the most recent payment in 2023 of XCD 1.5 million. The organization has a high dependence on reinsurance to mitigate losses and protect its surplus, as all operating territories are in catastrophe zones, a strategy that is similar to other Caribbean property/casualty insurers. The company’s reinsurance program has adequately protected capitalization over the years and it uses a panel of high-quality reinsurance counterparties, with no history of reinsurance disputes. Additionally, TDCIC’s affiliation with East Caribbean Reinsurance Company Limited helps TDCIC reduce the cost of access to its reinsurance markets. The organization’s investment portfolio remains conservative, comprised primarily of cash and short-term investments, to maintain ongoing liquidity.

TDCIC’s operating performance is strong and is driven predominantly by its motor and property lines of business. TDCIC generates low loss ratios from its prudent underwriting and risk management practices. Additionally, investment income contributes materially to total operating earnings.

The organization’s limited business profile is primarily due to elevated concentration risk, as its business is exclusively derived from St. Kitts and Nevis, and its business is mostly comprised of property and motor premiums. TDCIC employs an ERM program to monitor and manage its organizational risks appropriately, such as concentration risk, and in recent years has made major investments in its ERM program.

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