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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - AUGUST 21, 2008 12:00 AM (EDT)
A.M. Best Co. has downgraded the financial strength rating (FSR) to B (Fair) from B+ (Good) and issuer credit rating (ICR) to "bb" from "bbb-" of CLICO (Bahamas) Limited (CLICO Bahamas) (Nassau, Bahamas). The outlook for both ratings is negative. CLICO Bahamas is an insurance member company of CL Financial Limited (CL Financial), a diversified holding company based in Trinidad and Tobago.
The downgrades reflect the significant exposure CLICO Bahamas has to affiliated loans as a percentage of assets and capital, the volatility of earnings in its international operations and its somewhat modest market share in the Bahamas, when compared to its competitors. CLICO Bahamas' loan to a real estate subsidiary, which represents a concentration risk and high exposure to the depressed Florida real estate market, has been revalued to reflect the current market conditions. A.M. Best feels that given most of its reserves are fixed annuities, this real estate exposure represents a mismatch to CLICO Bahamas' liabilities. In addition, certain of its non-Bahamas regions have produced operating losses.
CLICO Bahamas' ratings recognize its ownership by CL Financial, as well as its overall insurance premium growth and profitability. CLICO Bahamas benefits from being part of CL Financial by leveraging information technology, administration, actuarial, investment and other group resources to effect operating efficiencies in its operations.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.