AM Best Affirms Credit Ratings of East Caribbean Reinsurance Company Limited

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of East Caribbean Reinsurance Company Limited (ECRC) (Anguilla). The outlook of these Credit Ratings (ratings) is positive.

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

The positive outlooks reflect ECRC’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). While ECRC’s absolute capital and surplus remains modest, its BCAR scores have consistently measured well into the strongest level over the last several years, highlighting the strength of its balance sheet given its relatively low levels of premium retention. ECRC has grown capital and surplus annually over the past five years through favorable net earnings supported by both underwriting and investment income. ECRC has made occasional dividend payments to its parent entity, TDC Group Limited (TDC Group), with the last dividend being paid in 2021. The balance sheet strength assessment is further supported by strong liquidity measures and a conservative asset portfolio, which is primarily composed of cash and short-term investments. The organization continues to have a high dependence on reinsurance; however, this risk is partially mitigated by the organization’s panel of high-quality reinsurers. The potential upward rating movement is conditioned on the continuation of absolute growth in capital and surplus, while maintaining the strongest level of risk-adjusted capitalization, as measured by BCAR.

ECRC’s operating performance is assessed as adequate. The company has reported a net gain in each of the last five years due to a conservative reinsurance structure and the absence of major catastrophic events. ECRC retrocedes most of the business it writes and retains only a modest amount of risk, which is reflected in its loss ratios. Additionally, ECRC has shown a favorable growth trend in gross premiums in recent years.

ECRC provides treaty and facultative reinsurance solutions for various lines of property/casualty coverage to TDC Group, and increasingly to other entities operating in the region. While ECRC has been aiming to diversify premiums by geography in recent years, the business remains concentrated in St. Kitts and Nevis and Anguilla.

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.

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