A.M. Best Affirms Ratings of Bahamas First General Insurance Company Limited and Cayman First Insurance Company Limited

Proquest LLC

A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit ratings of "a-" of Bahamas First General Insurance Company Limited (BFG) (Nassau, Bahamas) and Cayman First Insurance Company Limited (CFIC) (Cayman Islands). The outlook for both ratings is stable. Both companies are subsidiaries of Bahamas First Holdings Limited (BFH) (Nassau, Bahamas).

The ratings of BFG reflect its continued excellent capitalization, historically favorable operating performance and leading market share in the Bahamian market. These factors are supported by BFG's, local market expertise, conservative catastrophe program and solid risk management programs. These positive rating factors are offset by BFG's dependence on reinsurance, geographic concentration and catastrophe exposure, particularly to hurricanes in the Caribbean. Additionally, there is increased competition within the Bahamian insurance market and lingering economic and fiscal concerns about the Bahamas' overall economic outlook.

The ratings of CFIC recognize its improved capitalization and positive non-health operating results along with its expertise in the Cayman market. CFIC's ratings also reflect improvements in the company's health business and the winding down of litigation from prior ownership, which continues to have a negative impact on the company's earnings and capital position.

While the outlook for BFG's ratings is stable, positive rating actions could occur if the company exhibits sustainable long-term improvements in operating performance coupled with improvements in the Bahamas' macroeconomic environment. Negative rating triggers could include protracted adverse operating results that are exacerbated by a large catastrophic event or a significant decline in risk-based capitalization.

Negative rating triggers for CFIC would include deterioration in its operating results, in particular from its accident and health business, or a decline in equity resulting in increased leverage metrics. Positive rating triggers would include continued improved profitability and organic surplus appreciation.

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 ambest.com/ratings/methodology.