NOVEMBER 06, 2019 11:07:53 Eastern Standard Time

AM Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of Colonial Group Intl. Ltd.'s Members

 Wayne Kaminski
Senior Financial Analyst—L/H
+1 908 439 2200, ext. 5061

Ricardo Longchallon
Senior Financial Analyst—P/C
+1 908 439 2200, ext. 5676

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - NOVEMBER 06, 2019 11:07:53 Eastern Standard Time
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 Ratings (Long-Term ICRs) of “a” for the life/health (L/H) and property/casualty (P/C) operating subsidiaries of Colonial Group International Limited (referred to as Colonial Group). The outlook assigned to these Credit Ratings (ratings) is stable. Colonial Group is a wholly owned intermediate holding company of Edmund Gibbons Limited, the ultimate parent company. All companies are domiciled in Bermuda, unless otherwise specified. (See below for a detailed listing of the companies.)

The ratings reflect Colonial Group’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Colonial Group’s primary operating market is Bermuda, where it has strong brand recognition and competes for business among the top insurance writers on the island. However, the operating disruption of the organization’s Bahamian business and the catastrophic damages caused by Hurricane Dorian prompted an AM Best response to place the (P/C) companies and Colonial Group under review with developing implications, along with other market participants with businesses domiciled in the Bahamas. AM Best has since evaluated the loss estimates and related reinsurance contracts of Security and General Insurance Company Limited, the Colonial Group entity primarily affected by the storm damage. The financial exposure to Colonial Group is within its current reinsurance contracts, and the net impact to the organization is anticipated to be minimal.

The earnings of Colonial Group have been subject to fluctuations over the past five years, where the primary driver of losses has been from its property business, and its health business has added stability. AM Best has factored into the ratings this stability, but notes the potential disruption from health reform in the Bermuda jurisdiction may result in pressure to garner earnings should further revisions to the nation’s health reform affect the competitive health insurance market landscape. AM Best also notes that the Colonial Group of companies has diversified sources of earnings from non-Bermudian operations that include the Cayman Islands, Bahamas and Southern Caribbean jurisdictions through its minority ownership of The Beacon Insurance Company Limited, a Trinidad and Tobago-based company expected to add business through its seven licenses in that region. It is expected that the company will expand its product offerings of medical, dental, life, long-term disability and accident, death and dismemberment coverage in these jurisdictions. The strength of the Colonial Group ratings is driven by its strongest balance sheet measures and specifically its strongest risk-adjusted capital measurement, which may allow the group to withstand future earnings instability over the medium term.

The FSR of A (Excellent) and the Long-Term ICRs of “a” have been removed from under review with developing implications and affirmed, with assigned outlooks of stable, for the following L/H and P/C operating subsidiaries of Colonial Group International Limited:

  • Colonial Medical Insurance Company Limited

  • Atlantic Medical Insurance Limited (Bahamas)

  • Colonial Life Assurance Company Limited

  • Colonial Insurance (BVI) Limited (British Virgin Islands)

  • Colonial Insurance Company Limited

  • Security and General Insurance Company Limited (Bahamas)

  • British Caymanian Insurance Company Limited (Cayman Islands)

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.

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