AM Best Upgrades Credit Ratings of East Caribbean Reinsurance Company Limited

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” (Good) from “bbb-” (Good) of East Caribbean Reinsurance Company Limited (ECRC) (Anguilla). The outlook of these Credit Ratings (ratings) has been revised to stable from 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 rating upgrades reflect continued improvement in ECRC’s balance sheet strength metrics. The company level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed as strongest. While absolute capital and surplus remains modest, ECRC’s BCAR scores have measured consistently at the strongest level for the past several years, showing the relative strength of its balance sheet given its lower levels of premium retention. ECRC has grown capital and surplus annually through favorable net earnings, despite occasional dividend payments to its parent entity, TDC Group Limited (TDC Group). Furthermore, the company’s balance sheet strength assessment is supported further by strong liquidity measures and a conservative asset portfolio, which is primarily composed of cash and short-term investments. However, ECRC has a high dependence on reinsurance, but it is mitigated by the use of a high-quality panel of reinsurers with cash calls built into its reinsurance program.

ECRC’s operating performance is assessed as adequate. The company has reported positive operating performance over the past several years and executed its business plans with discipline through fiscal year-end 2025, which is expected to continue through fiscal year-end 2026. Earnings are attributable to the company’s conservative reinsurance structure and the absence of major catastrophe 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, gross premiums have grown steadily in recent years and AM Best expects this to continue through fiscal year-end 2026.

ECRC’s business profile is assessed as limited. While premiums have been diversifying geographically in recent years, they remain concentrated in St. Kitts and Nevis and Anguilla. Moreover, ECRC provides treaty and facultative reinsurance solutions for various lines of property/casualty coverage to TDC Group, while expanding its business to other entities operating in the region. The organization aims to achieve growth within existing guidelines without increasing its net retained risk.

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