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FOR IMMEDIATE RELEASE
MEXICO CITY - JULY 19, 2021 01:01 PM (EDT)
AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good) to International Traders Insurance Co., Ltd. (Itico) (Turks and Caicos Islands, British West Indies). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Itico’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The ratings also reflect the company’s strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by consistent historical profitability and a successful business strategy. Partially offsetting these positive rating factors is the small size of the company, which limits business diversification given the inherent concentration risk.
Itico is a reinsurance company with 40 years of experience in the sector. The company is domiciled in the Turks and Caicos Islands, and has a representative office in Panama through which it operates for different countries in Central America. The Panama office is recognized as the financial center of the region, which provides easy access to the Central American market. Itico is owned by a pure holding company that is domiciled in the Cayman Islands.
Within the reinsurance market, Itico stands out for its commercial relationships with the ceding companies and the structuring of reinsurance programs according to the needs of its clients.
As of December 2020, Itico’s business portfolio was comprised 65% by group life, 29% by diverse and the rest (6%) in other business lines; it is diversified geographically among Panama, Honduras, Guatemala and El Salvador.
Itico’s risk-adjusted capitalization stands at the strongest levels for historical and projected years, mainly as a result of a conservative investment base, low retention profile and a good quality of capital. On the downside, management is prone to use its capital efficiently, which might lead to further dividends down the road.
The company’s overall results are characterized by sustained profitability, despite the fluctuations in the gross written premium volume. The loss ratio has remained contained due to the fact that Itico’s most important business line, group life insurance, has a very low claims level. The investment income shows a stable trend, moderately supporting Itico’s income generation.
Positive rating movements are not expected in the medium term. Negative rating actions could occur if premium growth or changes in the investment and/or underwriting risk profile reduce risk-adjusted capitalization to a level that no longer supports the ratings, or if Itico’s business strategy has an unfavorable development, shifting the company’s operating performance metrics to levels no longer consistent with the strong assessment.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Guide to Best’s Credit Ratings.
This press release relates to rating(s) that have been published on AM Best’s website. For additional 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.
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AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.