AM Best Affirms Credit Ratings of RoyalStar Assurance Ltd.

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” (Excellent) of RoyalStar Assurance Ltd. (RSA) (Nassau, Bahamas). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect RSA’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

RSA’s balance sheet strength is derived from its strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), strategically conservative investment portfolio and comprehensive reinsurance program. These strengths are offset partially by RSA’s exposure to weather-related catastrophe events, given its geographic concentration of business in the Caribbean, and its high reliance on reinsurance to protect its balance sheet and surplus from catastrophe events.

RSA’s consistently strong operating performance continued in 2021 as demonstrated by solid overall earnings and operating metrics. RSA’s strong results have been bolstered by favorable underwriting performance, with all lines of business remaining profitable excluding liability in 2021, in addition to investment income and commission income derived from business ceded to reinsurers.

AM Best views the company’s business profile as limited. RSA provides personal and commercial lines coverages throughout the Bahamas, the Cayman Islands, the Turks and Caicos Islands, the U.S. Virgin Islands, the British Virgin Islands and Anguilla. Like many property/casualty insurers operating in the Caribbean, RSA cedes a significant portion of its written premiums to reinsurers under its reinsurance treaties. In addition, earnings remain subject to highly competitive, mature regional markets with limited potential for organic growth.

AM Best expects the company to continue to produce favorable results supported by its enterprise risk management framework in place, despite its exposure to catastrophe events. RSA’s risk management capabilities and comprehensive reinsurance program mitigates much of its risk exposure and will continue to support its balance sheet strength and operating performance.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Anthony Molinaro
Senior Financial Analyst

+1 908 439 2200, ext. 5608

anthony.molinaro@ambest.com

Sharon Marks
Director

+1 908 439 2200, ext. 5477

sharon.marks@ambest.com

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jeff Mango
Managing Director,

Strategy Communications

+1 908 439 2200, ext. 5204

jeffrey.mango@ambest.com

Source: AM Best