AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of
The ratings reflect CAIC’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
The balance sheet strength is derived from the company’s risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Capital growth has been driven by strong earnings; however, growth was limited in 2020 due to the distribution of a large stockholder dividend. CAIC’s balance sheet strength is supported further by a highly liquid and conservative investment portfolio, and its comprehensive reinsurance program to protect earnings and surplus in the event of a natural catastrophe.
Strong operating results have been bolstered by favorable underwriting performance, especially in non-catastrophe years. Despite an economic shutdown in most of CAIC’s operating territories due to the COVID-19 pandemic, the company produced its strongest performance over the past five-year period. Operating performance metrics continue to rank CAIC amongst the top of its
These strengths are offset partially by the company’s high dependence on reinsurers to protect its balance sheet from the impact of catastrophe events. In addition, earnings remain subject to highly competitive regional markets and constrained by the financial and economic challenges in the region.
Nevertheless, AM Best expects the company to continue to produce favorable results supported by its operations in 15 territories throughout the
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Source: AM Best