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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 28, 2018 03:29 PM (EDT)
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Massy United Insurance Ltd. (Massy United) (Barbados). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect Massy United’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Massy United’s balance sheet strength is underpinned by its risk-adjusted capitalization being at the strongest level and a comprehensive reinsurance program. Massy United is an indirect subsidiary of Massy Holdings Ltd., (Massy) a large Caribbean-based conglomerate, which is publicly traded on the Trinidad and Tobago stock exchange.
Massy United’s balance sheet strength has been supported by historically profitable operating performance and prudent catastrophe risk management, which limits exposure to natural catastrophe events. In addition, A.M. Best’s assessment of the company’s balance sheet strength contemplates the adverse impact on its assets from the sovereign downgrade of Barbados and the implementation of IFRS 9.
Overall earnings have been attributed to profitable underwriting supplementing net investment returns. Notwithstanding, earnings remain subject to a mature, highly competitive regional market, as well as a low interest rate environment and financial and economic instability in Barbados. The company offers a full range of personal and commercial insurance products, including property and motor, in various Caribbean countries.
Growth potential outside of mergers and acquisitions is very limited in its primary markets of Barbados, Trinidad and Tobago, Antigua and throughout the Caribbean in general. In addition, the Caribbean market may be volatile from time-to-time due to severe weather events as evidenced by Hurricanes Matthew, Irma and Maria during the preceding two years. However, the impact of large losses is mitigated materially by Massy’s property catastrophe reinsurance program, which is mainly backed by high quality reinsurers
The stable outlook reflects A.M. Best’s expectation that Massy United will maintain strongest balance sheet strength and favorable operating results in the near to intermediate term. Positive rating action could occur if the company exhibits sustainable long-term improvement in operating performance coupled with improvement in Barbados’ macroeconomic environment and country risk tier. Negative rating action may occur if risk-adjusted capitalization declines to a level that no longer supports the current balance sheet strength assessment, if the country risk tier for Barbados is downgraded or if a trend of adverse earnings develops.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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