OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating of A- (Excellent) and issuer credit ratings (ICR) of “a-” of Guardian Life of the Caribbean Limited (GLOC) and Guardian General Insurance Limited (GGIL).
Concurrently, A.M. Best has assigned an ICR of “bbb-” to Guardian Holdings Limited (GHL), which is a publicly traded holding company for both GLOC and GGIL. The outlook assigned to this rating is stable. GHL is listed on the Trinidad and Tobago and Jamaican stock exchanges. All companies are domiciled in Port of Spain, Trinidad.
The revised outlook for GLOC and GGIL reflects GHL’s improved consolidated balance sheet strength, which is due to a decrease in its financial leverage following the International Finance Corporation’s equity stake in GHL and bond refinancing; profitable operating results;, exposure to low intangible assets compared to prior years and the company’s reduced exposure in Jamaica as a result of the sale of its Jamaican asset management arm in 2010. The consistent profitability of both GLOC and GGIL, which are core insurance subsidiaries of GHL, also adds strength to GHL’s balance sheet and consolidated total equity. Nevertheless, A.M. Best notes that the outstanding level of financial leverage at GHL remains somewhat high relative to its total equity. GHL’s exposure in Jamaica through its life insurance subsidiary, although small, remains an ongoing concern.
The ratings of GLOC acknowledge its strategic position within the GHL group, strong competitive advantage in the Trinidad and Tobago markets, consistently positive gains from operations and its more than adequate level of risk-adjusted capitalization. Offsetting these strengths are the impact of continuing volatility in the local, regional and global equity markets and the competitive and mature nature of the Trinidad and Tobago insurance marketplace.
The ratings of GGIL recognize its leading regional market presence, historically profitable operating performance, adequate capitalization and the support and commitment of GHL. GGIL is the largest property/casualty writer in the Caribbean with a major presence in Trinidad and Tobago and several other markets in the region. Partially offsetting these strengths is the increased frequency of catastrophic events in the region, the company’s reliance on reinsurance to protect its earnings and surplus and the increasingly competitive regional markets in which GGIL operates.
The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “A.M. Best’s Ratings & the Treatment of Debt”; “Natural Catastrophe Stress Test Methodology”; “Catastrophe Analysis in A.M. Best Ratings”; “Catastrophe Risk Management Incorporated Within the Rating Analysis”; “Rating Members of Insurance Groups”; “Understanding BCAR for Property/Casualty Insurers”; and “Assessing Country Risk.” Methodologies can be found at www.ambest.com/ratings/methodology.
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