AM Best

A.M. Best Affirms Ratings of Investors Trust Assurance SPC and Revises Issuer Credit Rating Outlook to Negative


Edward Kohlberg

Senior Financial Analyst

(908) 439-2200, ext. 5664

William Pargeans

Assistant Vice President

(908) 439-2200, ext. 5359
Rachelle Morrow

Senior Manager, Public Relations

(908) 439-2200, ext. 5378

Jim Peavy

Assistant Vice President, Public Relations

(908) 439-2200, ext. 5644


OLDWICK, N.J. - SEPTEMBER 26, 2013 12:00 AM (EDT)
A.M. Best Co. has revised the outlook to negative from stable and affirmed the issuer credit rating (ICR) of “bbb+” of Investors Trust Assurance SPC (ITA) (Cayman Islands). At the same time, A.M. Best has affirmed the financial strength rating (FSR) of B++ (Good) of ITA. The outlook for the FSR is stable.

The revised outlook for the ICR is due to ITA’s elevated exposure to below investment grade structured securities. While many of these securities are rated below investment grade, there have currently been no impairments in the portfolio. These securities primarily back surplus and ITA’s fixed income product, which has seen increases in sales over the last year. While these securities were purchased at a discount, obtaining favorable yield is dependent on the performance of the investments’ underlying collateral. The rating actions also recognize the company’s reliance on the market value of assets under management for a portion of revenue. Another challenge for ITA is to achieve a favorable market investment portfolio performance in the current difficult economic climate and the continued changing global regulatory environment.

The rating affirmations acknowledge ITA’s profitable operations and strong risk-based capitalization measures. ITA has relatively limited insurance risks because its policies carry a limited death benefit. The ratings also acknowledge ITA’s broad network of independent financial advisors in Latin America and Asia Pacific, management’s prior history of relevant investment marketing experience and increases in new sales for the current year driven by a growing international presence. A.M. Best will continue to monitor ITA’s overall performance, particularly the performance of its fixed income portfolio and ability to attain profitable spreads.

A revision of the negative outlook to stable on ITA’s ICR could occur through decreased credit risk exposure in its investment portfolio. Downward rating actions could result from material negative changes in the company’s capitalization, operating performance or its business model.

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. Best’s Credit Rating Methodology can be found at

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.

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AMB# Company Name
075811 Investors Trust Assurance SPC