AM Best Downgrades Credit Ratings of Summit Insurance Company Limited

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Rating to “bbb+” (Good) from “a-” (Excellent) of Summit Insurance Company Limited (Summit) (Nassau, Bahamas). The outlook of these Credit Ratings (ratings) is stable.

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

Summit continues to have the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s BCAR on a catastrophe-stressed basis is considered to be at the strongest level, and has historically protected the capital base in years during which it has experienced a catastrophic event. Like most Caribbean-domiciled insurance companies, Summit has a high dependence on reinsurance to manage capital exposure from catastrophe events. While Summit’s reinsurance dependence is high, coverage is appropriate as it uses high quality reinsurance partners and has enhanced liquidity metrics through cash call provisions.

The ratings downgrade reflects a sustained trend of lower operating and net earnings. Results have been impacted by increased reinsurance costs following the hardened market that was largely due to Hurricane Dorian in 2019 and a dramatic hardening of the reinsurance market in 2023. Reinsurance costs have declined materially in 2025 and 2026; however, during the second quarter of 2025, Summit experienced the largest fire loss in the company’s history, which deteriorated in the fourth quarter and had a negative impact on the underwriting results for the year. Projections indicate improvement in the near term but return metrics will remain lower than pre-2019 results.

Summit has a high geographic concentration in a competitive market that is reflected in its limited business profile assessment. The company’s limited geographic reach, operating solely in the Bahamas, exposes it to high economic and financial system risk, as well as the Bahamas’s moderate political risk.

The ERM program for Summit is assessed as appropriate given its size and scope. While a formalized framework has not yet been finalized, the company practices risk management throughout the organization, which is further supported by the good reinsurance program.

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