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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - AUGUST 23, 2013 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of United Insurance Company Limited (United) (Barbados). The outlook for both ratings is stable.
The ratings reflect United’s solid capitalization, historically favorable underwriting performance and strong regional market profile. Furthermore, United benefits from the full support of its ultimate parent, Neal and Massy Holdings Limited, a large Caribbean-based conglomerate, which is publicly traded on the Trinidad and Tobago and Barbados stock exchanges.
Over the past several years, United’s earnings have been impacted by significant operating losses stemming from its assumed reinsurance line of business, which culminated in 2011 with a net loss for the company. However, United’s management team has implemented corrective actions to exit its assumed reinsurance business and to refocus its operating strategy on its core Caribbean book of business. Year-end 2012 and year-to-date results reflect this change in strategy as profitability has begun to trend up from 2011 lows.
Although United’s exit from its assumed reinsurance line of business is anticipated to have considerable costs in the short term, it is A.M. Best’s expectation that United’s renewed concentration on its core businesses should return it to former levels of profitability.
While the outlook for United’s ratings is currently stable, potential negative rating triggers could include adverse operating results relating to its Caribbean book of business that are exacerbated by a large catastrophic event. Positive rating actions could occur if the company exhibits sustainable long-term improvements in operating performance coupled with improvements in Barbados’ macroeconomic environment and country risk tier.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. 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.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.