Best’s News & Research Service - August 02, 2023 01:58 PM (EDT)
AM Best Affirms Credit Ratings of Genesis Global Insurance (SAC) Ltd.
- August 02, 2023 01:58 PM (EDT)
Mexico City //BestWire// - AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Genesis Global Insurance (SAC) Ltd. (Genesis) (Nassau, Bahamas). The outlook of these Credit Rating (ratings) is stable.
The ratings reflect Genesis’ strategic importance as a subsidiary of La Colonial, S.A. - Compañía de Seguros (La Colonial), which on a consolidated basis has a balance sheet strength that AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The ratings also reflect the company’s affiliation with its ultimate parent company, La Colonial, which is a leading insurer in the Dominican Republic, supported by a strong parental guarantee, in place since September 2022. Genesis also is integrated in all core processes and ongoing strategic initiatives of the group. Offsetting these positive factors is the inherent risk of a startup company 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 owned fully by La Colonial. Genesis’ main business purpose is to retain risk exposures that currently are transferred to the market or retained by La Colonial. Genesis’ capacity is handled through La Colonial’s reinsurance broker, Wahr Re.
Genesis offers general insurance, including the following risks: motor vehicle, property and liability. Due to the nature of the startup company’s strategy, there is concentration in a single distribution channel, and exposure to catastrophe insurance.
Genesis is considered part of La Colonial’s group rating unit due to AM Best’s expectation that La Colonial will support Genesis to the full extent of its financial strength. This is reflected by the strong parental guarantee and explicit capital support, as well as Genesis’ strategic importance to the group as a vehicle to diversify operations outside the Dominican Republic.
If positive rating actions are taken on La Colonial, as a result of its ability to maintain its current level of risk-adjusted capitalization while improving its bottom-line results and profitability indicators to levels more in line with highly rated peers, it would result in positive rating action on Genesis. If any negative rating actions are taken on La Colonial, as a result of erosion of its capital base, either due to negative operating performance or changes in the macroeconomic environment that adversely impact the company’s operations, or any major changes in its capital base, including significant dividends or capital outflows, which diminish AM Best’s view of the company’s balance sheet strength, it would result in negative rating actions being taken on Genesis.
A change in AM Best’s perception regarding the strategic importance of Genesis to the group also could impact Genesis’ ratings.
The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Nov. 13, 2020), 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 May 4, 2023)
- Understanding Global BCAR (Version July 6, 2023)
- Catastrophe Analysis in A.M. Best Ratings (Version March 10, 2023)
- Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
- Scoring and Assessing Innovation (Version Feb. 27, 2023)
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, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best’s Credit Ratings.
- Previous Rating Date: March 8, 2023
- Initial Rating Date: July 9, 2021
- Date Range of Financial Data Used: Dec. 31, 2018-Dec. 31, 2022
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