OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb” of Jamaica International Insurance Company Limited (JIIC) (Jamaica). The outlook for both ratings is negative.
The rating affirmations reflect JIIC’s strong market profile, continued adequate capitalization and financial flexibility as a result of the support and commitment of its parent, GraceKennedy Limited (GK Group), one of the leading business conglomerates in the region. GK Group is publicly traded on the Jamaica and Trinidad stock exchanges.
The negative outlook is based on JIIC’s reduced investment income levels due to lower interest rates as a result of the restructuring of Jamaican bonds. In the past, JIIC’s investment income had produced positive overall earnings and consistently mitigated underwriting losses. JIIC’s management team has implemented strategies to improve underwriting performance, which resulted in an operating profit in 2011. A.M. Best is encouraged by the early success of these strategies but remains uncertain as to the sustainability of these results given the current challenges facing the Jamaican economy and insurance market. Additionally, JIIC has significant exposure to catastrophic events and must maintain a costly reinsurance program to protect its earnings and surplus.
Key rating factors that could lead to a stable outlook include improved, sustainable underwriting results, an improvement in JIIC’s risk-based capitalization or an upgrade in Jamaica’s country risk tier. Negative rating factors would include deterioration in JIIC’s risk-based capitalization, a decline in its operating performance or further weakening of the Jamaican macroeconomic environment.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “Catastrophe Analysis in A.M. Best Ratings”; “Evaluating Non-Insurance Ultimate Parents”; and “Evaluating Country Risk.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
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