A.M. Best Revises Outlook to Positive for Caribbean Alliance Insurance Company Limited [Professional Services Close – Up]

Proquest LLC

A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Caribbean Alliance Insurance Company Limited (CAIC) (Antigua and Barbuda).

The ratings reflect CAIC's excellent risk-adjusted capitalization, conservative management philosophy and historically profitable operating results. CAIC's strong overall results are driven by consistently profitable underwriting and complemented by interest income earned from the company's very conservative investment portfolio. The positive outlook also reflects CAIC's profitable return metrics, which places it among the top of its Caribbean peers. Additionally, CAIC has a solid market profile and its management team has extensive knowledge of the islands in which the company operates. Management also maintains effective risk management procedures and a comprehensive reinsurance program.

These positive rating factors are partially offset by CAIC's geographic concentration, dependency on reinsurance and continued exposure to catastrophe events. Furthermore, Caribbean insurance markets have become increasingly competitive, and tenuous economic conditions throughout most of the Caribbean have persisted.

Factors that could lead to additional positive rating actions for CAIC include continued solid underwriting and operating results as well as strong risk-adjusted capitalization. Negative rating actions could include a downgrade in Antigua's country risk tier, deviation from the company's conservative growth trajectory and a significant decline in risk-adjusted capitalization or operating performance.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides an explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process.

A.M. Best Company is an insurance rating and information source.