Best’s News & Research Service - December 14, 2022 12:05 PM (EST)
AM Best Affirms Credit Ratings of Summit Insurance Company Limited
- December 14, 2022 12:05 PM (EST)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Summit Insurance Company Limited (Summit) (Nassau, Bahamas). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Summit’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
Summit’s balance sheet strength is assessed at the strongest level, based on its strongest assessed risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), conservative investment portfolio predominantly composed of cash and short-term assets, and the company’s utilization of quality reinsurers to reduce its net exposure to natural catastrophes especially wind events. The organic growth of surplus over the years has been achieved through favorable earnings.
AM Best assesses Summit’s overall operating performance as strong. However, in recent years, operating metrics have been deteriorating toward the lower end of what is assessed as strong as higher reinsurance rates and loss costs pressure underwriting. Underwriting pressure is reflective of the operating environment in the Bahamas where competition is intense, reinsurance dependance is very high, and primary market pricing is currently soft on a historical basis. Management has taken action toward restoring historical operating performance, and through nine months of 2022, underwriting results are significantly ahead of the prior year. High geographical concentration and competitive pressures also are reflected in the company’s limited business profile assessment, which also reflects high economic and financial system risk and the moderate political risk of the Bahamas.
This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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.