CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 27, 2019 09:28 AM (EDT)
AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Sagicor General Insurance Inc. (Sagicor General) (Bridgetown, Barbados). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Sagicor General’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect lift from its parent and the lead rating unit, Sagicor Life Inc., based on implicit support.
These factors are supported by Sagicor General’s strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and the financial flexibility of being a subsidiary of Sagicor Financial Corporation Limited (SFC), a publicly traded holding company that is listed on the Barbados, Trinidad and Tobago and London stock exchanges. SFC has a long market history through its operating subsidiaries, very strong brand recognition and diversified geographical reach throughout the Caribbean region.
Sagicor General benefits from its competitive position in the markets it serves and the reinsurance support provided by its long-standing reinsurance partners. The company is one of the leading property and auto insurers in Barbados, and also maintains a significant presence in Trinidad and Tobago. Aside from the adversity encountered from Hurricane Maria in 2017 and impairment on Barbados government debt restructuring, which resulted in a significant decline in equity and the need for a substantial capital injection to bolster its BCAR, Sagicor General has generally produced positive overall operating results, which are derived from its significant ceding commissions and underwriting gains from its private passenger auto book of business.
Additional rating considerations include difficult local macroeconomic conditions and the increasingly competitive regional insurance environment throughout the Caribbean. In addition, the company has significant loss exposure in the region to catastrophic weather events, which is mitigated materially by a comprehensive reinsurance program backed by quality reinsurers. Prospectively, earnings remain subject to a mature, highly competitive regional market and catastrophe losses, given its exposure.
The stable rating outlooks reflect AM Best’s expectation that the company’s rating fundamentals will remain unchanged in the intermediate term, including balance sheet strength remaining in the very strong category and overall operating performance commensurate with similarly rated peers.
The company was placed previously under review with developing implications following the announcement that Alignvest II Corporation, a special purpose acquisition company listed on the Toronto Stock Exchange, planned to acquire SFC’s common stock. AM Best notes that Alignvest Acquisition II Corporation’s acquisition of SFC in 2019 and its pending listing on the Toronto Stock Exchange has improved the company’s capital position and financial flexibility. AM Best will continue to monitor any developments and take any appropriate rating action.
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 Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry.