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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JULY 13, 2012 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of a- of United Insurance Company Limited (United) (Barbados). The outlook for both ratings is stable.
The ratings reflect Uniteds solid capitalization, historically favorable underwriting performance and strong regional market profile. Furthermore, United enjoys full support from its ultimate parent, Neal and Massy Holdings Limited, a large Caribbean-based conglomerate, which is publicly traded on the Trinidad and Tobago and Barbados stock exchanges.
Uniteds net income has been impacted by significant operating losses stemming from its assumed reinsurance segment over the past several years, culminating in 2011 with a net loss for the company. Uniteds management team has undertaken corrective action plans to exit and run-off its assumed reinsurance business and to refocus its operating strategy on its core Caribbean book of business. Although exiting from its assumed reinsurance line of business is anticipated to have considerable costs over the next several years, it is A.M. Bests expectation that Uniteds renewed concentration on its core businesses should return the company to its former level of profitability.
While the outlook for United is currently stable, potential negative rating triggers could include protracted adverse operating results that are exacerbated by a large catastrophic event. Positive rating actions could occur if the company exhibits sustainable long-term improvements in operating performance coupled with improvements in Barbados macroeconomic environment and country risk tier.
The methodology used in determining these ratings is Bests Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bests 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 BCAR for Property/Casualty Insurers; Understanding Universal BCAR; Catastrophe Analysis in A.M. Best Ratings; Evaluating Non-Insurance Ultimate Parents; Insurance Holding Company and Debt Ratings; and Assessing Country Risk. Bests Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the worlds oldest and most authoritative insurance rating and information source.