Best’s News & Research Service - July 09, 2021 02:59 PM (EDT)
AM Best Assigns Credit Ratings to Genesis Global Insurance (SAC) Ltd.
- July 09, 2021 02:59 PM (EDT)
Mexico City //BestWire// - AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good) to Genesis Global Insurance (SAC) Ltd. (Genesis) (Nassau, Bahamas). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Genesis’ balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings also reflect the company’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and the affiliation with its ultimate parent company, La Colonial, S.A. - Compañía de Seguros (La Colonial), which is one of the leading insurers in the Dominican Republic. Offsetting these positive factors is the inherent risk of a startup implementing its business plan, as well as distribution channel and product concentration.
Genesis is a startup reinsurance company 100% owned by Altos International LLC, which in turn is fully owned by La Colonial. Genesis’ main business purpose is to retain risk exposures that are currently transferred to the market, or self-insured by La Colonial. Genesis’ capacity will be handled through La Colonial’s reinsurance broker, Wahr Re.
Genesis will offer general insurance, including the following risks: motor vehicle, property and liability. Due to the nature of the new company’s strategy, there is concentration in a single distribution channel, as well as exposure to catastrophe insurance, which limits AM Best’s view of the company’s business profile.
The company’s very strong balance sheet assessment is derived from its strongest level of risk-adjusted capitalization. To achieve its business targets, the company has been capitalized with USD 2.5 million, and might be subject to more capital contributions as the operation evolves. There will also be capital relief from the use of reinsurance, as Genesis will cede approximately 70% of its business, in line with the reinsurance program of the ultimate parent company.
The adequate assessment of Genesis’ operating performance reflects the successful track record of its management and underwriting teams, and the operational leverage the company gains from being integrated into La Colonial.
Positive rating movements are not expected in the medium term. Negative rating actions could occur if the company experiences a deterioration in its risk-adjusted capitalization as a result of the inherent execution risk or if AM Best determines that the strategic importance of Genesis to La Colonial has decreased.
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:
- Evaluating Country Risk (Version Oct 13, 2017)
- Understanding Universal BCAR (Version Mar 11, 2021)
- Available Capital & Holding Company Analysis (Version Oct 13, 2017)
- Rating New Company Formations (Version Oct 13, 2017)
- Scoring and Assessing Innovation (Version Mar 05, 2020)
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.
- Previous Rating Date: Not Rated
- Date Range of Financial Data Used: June 25, 2020-June 30, 2021
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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