Best's Review


Caribbean Insurers
AM Best: Climate, Reinsurance and Cyber Remain High in the Caribbean Risk Landscape

The Caribbean insurers rated by AM Best posted favorable earnings in 2021. See the Best’s Rankings list of the Largest Caribbean Insurers — 2022 Edition.
  • October 2022
SWEEPING VISTA: A view of Nassau, capital of the Bahamas and its largest city. Climate risk is the biggest threat to the Caribbean region, according to AM Best.

SWEEPING VISTA: A view of Nassau, capital of the Bahamas and its largest city. Climate risk is the biggest threat to the Caribbean region, according to AM Best.

Editor's Note: The following is an excerpt from the Best's Market Segment Report: Climate, Reinsurance, and Cyber Remain High in the Caribbean Risk Landscape. Visit to access the full report.

The rated Caribbean insurers endured another challenging year in 2021, after negotiating a vast number of hurdles owing to COVID-19 in 2020, including government-imposed lockdowns, shelter-in-place restrictions, struggling economies and tepid investment markets. The pandemic tested the risk management and capabilities of both P/C and L/H insurers. Business continuity and growing cyberrisk threats came to the fore as companies adjusted to the reality of working remotely.

Amid this backdrop, climate risk adds an additional layer of uncertainty as it remains the biggest threat to the Caribbean. The experience of Hurricanes Irma and Maria in 2017 and Hurricane Dorian in 2019, which resulted in significant economic losses across the Caribbean, have impacted risk appetites and pricing for reinsurance across the region. The region has experienced some respite in the benign loss years following Hurricane Dorian. Although the 2021 hurricane season was very active, the region was spared any significant land-falling hurricanes. One hurricane, Elsa, did threaten the Caribbean in early July, but it weakened into a tropical storm the day after being named a hurricane; insured losses were estimated at US$50 million according to Karen Clark and Company.

Related: AM Best: Pandemic Spurs Innovation Among Caribbean Insurers

In August 2021, Haiti was struck by a 7.2 magnitude earthquake, which served as a reminder that the region is susceptible to not only wind events but also seismic activity. According to Karen Clark and Company, insured losses were estimated at US$250 million while economic losses were estimated between US$1 billion and US$7 billion, indicating that barely 15% of losses were insured—once again highlighting the significant protection gap in the region, as well as the major role that greater insurance penetration can play in narrowing that gap.

Despite the low level of claims activity in 2021 and thus far in 2022, reinsurance pricing continues to reflect increased hardening as insurers and reinsurers are feeling the effects of inflation. Construction industry costs such as labor, lumber, and other raw materials have increased considerably and are reflected in higher loss costs for insurers and reinsurers. In addition, the growing frequency and severity of global catastrophic events have forced reinsurers to adopt a more circumspect approach to climate risk. In some instances, this has resulted in double jeopardy for Caribbean insurers in the form of higher reinsurance rates (more than 15%) and less capacity. A hardening casualty market and changing perspectives on property risk have caused reinsurers to allocate more capital to casualty risks and shy away from property exposures—a challenge for the Caribbean insurance market.

The economic contraction experienced in many Caribbean countries also delayed the execution of a number of growth and strategic initiatives for insurers in the region. Caribbean insurers are now navigating through economic headwinds and market volatility spurred on by inflation, slower economic growth, and global geopolitical tensions. All of these are on the heels of what is still anticipated to be a busy Atlantic hurricane season. In its August 4, 2022 update, the National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center is forecasting a likely range of six to 10 hurricanes, including three to five major ones.

Improvement in Overall 2021 Net Income for Property/Casualty Companies

In 2021, the consolidated net income of the rated Caribbean P/C insurers improved over 2020 levels. In general, the group performed creditably in both years, with all but one insurer recording a loss, highlighting the risk management practices of the Caribbean P/C insurers AM Best rates. Some insurers posted lower earnings despite profitable results, attributable partly to the reopening of regional economies and the end of government-imposed lockdowns, which resulted in more normal claims utilization levels.

Related: Best's Special Report: Caribbean Insurers Resilient in the Face of Natural Disasters

Consequently, the 2021 consolidated loss ratio for rated P/C companies increased by 3.4 percentage points (to 47.4% from 44.0% in 2020), with most companies reporting higher loss ratios. Consolidated gross premiums for 2021 rose by 10.6%, reflecting continued price firming in certain territories, while net premiums rose by 5.3%, despite higher cessions by some companies. The overall combined ratio deteriorated slightly, to 95.3 from 94.8 in 2020, which had improved by 4.1 percentage points over 2019. Consolidated surplus increased by 3.2% over 2020 to US$853.9 billion, reflecting the group's favorable earnings in 2021.

2021 Revenue for Life/Health Companies Improves Slightly

The Caribbean L/H companies experienced a slight improvement in top line growth after emerging from the pandemic-related disruptions, as total revenue was up slightly. Both life and health premiums stabilized as insurers no longer had to provide premium relief to policyholders as economic conditions improved, stay-at-home restrictions abated, and tourism reversed from its bottom. Insurers with direct exposures to mortgage loans and bonds continued to experience declining valuations in certain regions, as companies analyzed their expected credit losses, probabilities of default, and assumptions on financial investments. As revenues and income stabilized due to an improving pandemic-related experience, the industry was able to generate earnings and absolute organic capital growth. In 2020, insurers benefited from a decline in health claims expenses because of changes in policyholder behavior and the drop in medical utilization due to stay-at-home conditions. Most of the improvement in net income was at Sagicor, which has broader geographic territories. Factors impacting income for insurers were related to improving premiums, growth in investment income and higher fee income, partially countered by a rise in claims payments as policyholders sought more health services than in the previous year. Consolidated equity grew by a modest 1.5%, compared to about 3% the previous year. In some cases, the capital improved owing to capital contributions from a parent company or organic growth in earnings.


Best's Rankings

Largest Caribbean Insurers — 2022 Edition

Insurers were ranked by 2020 gross premiums written.

(US$ Thousands)

Rank Company/Group AMB# Country of Domicile Gross
Capital &
1 Manufacturers Life Reins Ltd 073838 Barbados $11,160,131 $802,208
2 IAT Reins Co Ltd 057453 Cayman Islands 2,044,114 1,163,043
3 RGA Atlantic Reins Co, Ltd. 090222 Barbados 1,937,772 1,441,213
4 Royal Bank of Canada Ins Co Ltd. 086956 Cayman Islands 1,844,704 1,362,803
5 T D Reins (Barbados) Inc 056952 Barbados 1,539,690 183,413
6 NCB Finl Group Ltd 044531 Jamaica 965,342 1,429,463
7 Greenlight Capital Re, Ltd. 055430 Cayman Islands 479,791 464,857
8 Knight Ins Co Ltd. 072139 Cayman Islands 472,603 786,084
9 Scotia Ins (Barbados) Ltd 057051 Barbados 468,612 169,060
10 Best Meridian Intl Ins Co SPC 086911 Cayman Islands 420,103 75,521
11 Lincoln Natl Reins Co (Barbados) Ltd 057025 Barbados 392,000 2,558,000
12 BMO Reinsurance Ltd 056229 Barbados 387,953 129,273
13 Barents Re Reins Co, Inc. 091083 Cayman Islands 386,270 515,845
14 London Life & Cas Reins Corp 086037 Barbados 366,946 532,032
15 Energy Ins Mutual Ltd 085496 Barbados 325,463 1,188,719
16 Raffles Ins Ltd 055019 Cayman Islands 320,042 473,222
17 Sagicor Life Jamaica Ltd 086086 Jamaica 319,344 399,550
18 Seguros Universal, S.A. 087832 Dominican Republic 303,471 93,665
19 Ocean Intl Reins Co Ltd 093077 Barbados 230,933 110,749
20 Humano Seguros S.A. 071369 Dominican Republic 208,270 66,725
21 CG United Ins Ltd. 086916 Barbados 198,112 75,479
22 Seguros Reservas S.A. 092870 Dominican Republic 179,958 97,031
23 Inreco Intl Reins Co 075491 Cayman Islands 167,784 296,816
24 Accelerant Hldgs 045356 Cayman Islands 164,900 82,000
25 Bahamas First Hldgs Ltd 087007 Bahamas 160,568 64,521
26 Mapfre BHD Compania de Seguros SA 084257 Dominican Republic 145,324 70,193
27 Island Heritage Ins Co, Ltd. 086644 Cayman Islands 142,028 54,987
28 Wentworth Ins Co Ltd 086298 Barbados 135,748 267,310
29 Fortegra Indemnity Ins Co LTD 075015 Turks and Caicos 128,812 44,105
30 Colina Ins Ltd 089077 Bahamas 124,089 155,489

Sources: BestLink logo and AM Best research data as of Aug. 31, 2022.

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