AM Best Revises Issuer Credit Rating Outlook to Negative for Jordan French Insurance Company Limited
AM Best has revised the outlook to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B (Fair) and the Long-Term ICR of “bb+” (Fair) of
The Credit Ratings (ratings) reflect JOFICO’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).
The revision of the Long-Term ICR outlook to negative reflects pressure on the company’s balance sheet strength stemming from a weakening risk-adjusted capitalisation and marginal liquidity levels driven by significant debtors balances, which as at year-end 2021 represented 140% of capital and surplus.
JOFICO’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which was at the very strong level at the end of 2021, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s BCAR scores deteriorated in 2021 from the strongest level as a result of increased underwriting risk driven by significant premium growth. The assessment factors in JOFICO’s small capital base, which heightens the sensitivity of its solvency position to potential shocks, and the company’s significant level of debtors. Another offsetting rating factor is JOFICO’s moderate dependence on reinsurance, although the associated risk is mitigated partially by a reinsurance panel of good credit quality.
JOFICO has a track record of adequate operating performance, demonstrated by a five-year (2017-2021) weighted average return-on-equity (ROE) ratio of 10.8%. The company’s operating performance is supported by its good underwriting profitability, with a five-year (2017-2021) weighted average combined ratio of 98.4%. While technical profitability has reduced moderately in recent years, AM Best expects JOFICO’s operating performance to remain adequate prospectively, translating in low double-digit ROE ratios.
JOFICO has a limited business profile as a mid-tier insurer in
JOFICO’s ERM framework is developing, with control and oversight of key risks conducted on a silo basis, and typically reactive in nature. AM Best expects the company’s risk management function to benefit from the recent appointment of a chief risk officer.
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 specialising in the insurance industry. Headquartered in
Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
src="https://cts.businesswire.com/ct/CT?id=bwnewssty=20220428006160r1sid=acqr8distro=nxlang=en" style="width:0;height:0" />
View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006160/en/
Financial Analyst
+44 20 7397 0267
[email protected]
Manager, Public Relations
+1 908 439 2200, ext. 5159
[email protected]
Director, Analytics
+44 20 7397 0268
[email protected]
Managing Director,
+1 908 439 2200, ext. 5204
[email protected]
Source: AM Best
EDITORIAL: Elect Levine to end Lara's insurance commissioner scandals [East Bay Times]
EIIA Board Names New President and CEO Dave Dietz to Lead EIIA
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News