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A.M. Best Affirms Ratings of Colonial Group International Ltds Operating Subsidiaries
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| Copyright: | Business Wire | | Source: | Business Wire | | Wordcount: | |
OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength ratings (FSR) of A- (Excellent) and issuer credit ratings (ICR) of "a-" of the life/health and property/casualty operating subsidiaries
of Colonial Group International Ltd (Colonial Group) (Bermuda). The outlook for all ratings is stable. Colonial Group is a wholly owned intermediate holding company of Edmund Gibbons Limited, the ultimate parent company based in Bermuda. (See below for a detailed listing of the companies and ratings.)
A.M. Best also has withdrawn the FSR and ICR of Colonial Group. The rating withdrawals are not due to any changes in the financial fundamentals of the organization but were necessary to conform to A.M. Best's standard holding company rating methodology. A.M. Best's financial strength rating is defined as an independent opinion of an insurer's financial strength and ability to meet its ongoing insurance policies and contract obligations. Colonial Group is a non-operating holding company with no insurance policyholders. A.M. Best's issuer credit rating is defined as an opinion regarding an issuer's ability to meet its ongoing senior financial obligations. Colonial Group is not a public company and has not issued any debt securities.
The rating affirmations reflect the operating subsidiaries' generally consistent increase in total consolidated equity, good risk-adjusted capitalization and their diversified business profile, with the focus on life/health and property/casualty markets in Bermuda, the Bahamas, Cayman Islands and the Caribbean.
Colonial Group's life/health subsidiaries have reported generally profitable trends over the past five years with the exception of Colonial Life Assurance Company Limited (CLAC) (Bermuda), which has reported losses over the same period. Colonial Medical Insurance Company Limited (Bermuda) and Atlantic Medical Insurance Limited (Bahamas) are both regional companies with a strong presence in their respective health markets. Both companies have continued to grow profitably in the group and individual medical businesses with additional earnings from life, dental and other ancillary health benefit product lines.
Within the property/casualty lines of business, Colonial Group's three operating subsidiaries generally have demonstrated good underwriting results, improved operating performance trends and continuing parental support. Furthermore, the group benefits from these subsidiaries' reinsurance leverage to manage their property/casualty risks, while growing direct premium revenues in their core markets.
Partially offsetting these strengths are Colonial Group's significant concentration risk in the volatile life/health lines of business in several geographic regions, vulnerability to frequency and severity of catastrophic events from the property/casualty risks within the market it serves, challenges of improving its unit-linked business and the fluctuating investment performance embedded within the operating subsidiaries.
In addition, A.M. Best notes that CLAC's unprofitable operating results will continue to be a challenge for the group. CLAC continues to require capital support from the group to ensure that adequate capitalization is maintained, while upfront costs associated with business growth are absorbed. Capital is managed through amounts due from related companies, which represents a large percentage of several of the entity's balance sheets.
The FSRs of A- (Excellent) and ICRs of "a-" have been affirmed for the following life/health and property/casualty operating subsidiaries
of Colonial Group International Ltd:
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Colonial Medical Insurance Company Limited
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Atlantic Medical Insurance Limited
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Colonial Life Assurance Company Limited
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Colonial Insurance Company Limited
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British Caymanian Insurance Company Limited
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Security and General Insurance Company Limited
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
A.M. Best Company
Analysts:
Joseph McGowan, 908-439-2200, ext. 5255
joseph.mcgowan@ambest.com
or
Ricardo Longchallon, 908-439-2200, ext. 5676
ricardo.longchallon@ambest.com
or
Public Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
Source: A.M. Best Company
This is a news service of Thomson Business Intelligence Service ©2006. This content is for your personal use only, subject to Terms and Conditions. No redistribution allowed.
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