Best’s News & Research Service - July 12, 2023 11:50 AM (EDT)
AM Best Revises Outlooks to Positive for Century Insurance Company (Guam) Limited
- July 12, 2023 11:50 AM (EDT)
Oldwick //BestWire// - AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Century Insurance Company (Guam) Limited (CIC Guam) (Guam).
The Credit Ratings (ratings) reflect CIC Guam’s 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 (ERM).
The revised outlooks reflect the company’s favorable operating performance evidenced by its five-year averages of key operating performance metrics that outpace the composite averages. The five-year combined ratio average is materially lower than the commercial casualty composite average, marked by a substantially lower loss ratio average, which is partially offset by an elevated expense ratio average, the latter influenced by the scale of the company. Income from core underwriting operations has consistently supported CIC Guam’s capital position over the last five years, with net income reported each year, and with only year 2022 reporting a surplus decline impacted by unrealized capital losses. Premium declines in older years were by design as management took greater control of its portfolio and refined its risk appetite; concurrently, the loss ratio also declined year over year.
CIC Guam’s overall balance sheet assessment of very strong is marked by the strongest level of risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR), generally increasing capital levels over the long term, lowering underwriting leverage and having a consistently favorable loss reserve development. The limited business profile assessment reflects narrow operations focused in Guam, albeit offering multiple products. The company maintains an appropriate ERM program including a robust reinsurance program to mitigate severe weather losses stemming from its concentrated exposure, including the most recent event, Typhoon Mawar in May of this year.
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.