Best’s News & Research Service - September 17, 2015 08:58 AM (EDT)
A.M. Best Revises Issuer Credit Rating Outlook to Stable for Investors Trust Assurance SPC
- September 17, 2015 08:58 AM (EDT)
Oldwick //BestWire// - A.M. Best has revised the outlook to stable from negative and affirmed the issuer credit rating (ICR) of "bbb+" of Investors Trust Assurance SPC (ITA) (Cayman Islands). Concurrently, 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 reflects the company's decreased exposure to additional structured security investments as the company has slowed the sales pace of their fixed income product. Growth of the fixed income product has been managed by lowering crediting rates over the past four years. While many of these structured securities, which back the fixed income product, are rated below investment grade, there have currently been no impairments in the portfolio. Moreover, the portfolio has demonstrated strong consistent performance and has experienced some rating upgrades over the past 12 months. While these securities were purchased at a discount offering the potential for enhanced yield, realizing higher yields is dependent on the performance of the investments' underlying collateral.
The rating actions also recognize the company's continued asset growth, adequate risk-adjusted capital ratios, stable source of fee-based revenue and favorable operating performance. Moreover, ITA has relatively limited insurance risks because its policies carry a limited death benefit. The ratings also acknowledge ITA's network of independent financial advisers in Latin America and Asia Pacific, management's prior history of relevant investment marketing experience and increases in new sales driven by a growing international presence in other regions.
Offsetting rating factors include the challenge to maintain a favorable market investment performance in the current difficult economic climate and the continued changing global regulatory environment. A.M. Best will continue to monitor ITA's overall performance, particularly the performance/growth of its fixed income portfolio and its ability to maintain profitable spreads.
This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.