A.M. Best Affirms Credit Ratings of Caribbean Alliance Insurance Company Limited
The ratings reflect CAIC’s balance sheet strength, which
The reinsurance program’s effectiveness was tested significantly by hurricanes Irma and Maria in 2017 and it responded as anticipated with minimal impact to shareholders’ equity. Despite the impact of the storms, CAIC’s risk-adjusted capitalization and operating performance metrics continue to place the company toward the top of its
Partially offsetting these rating strengths is CAIC’s dependence on reinsurers to protect its balance sheet, as they did in 2017. The material gross losses from the 2017 hurricanes created a temporary situation in which risk-adjusted capitalization was weakened by the credit risk associated with a spike in reinsurance recoverables. This increase was offset somewhat by the cash call provisions in the reinsurance treaties responding as intended, and then subsequently by the payment of the claims. In addition, soft market conditions, higher reinsurance costs and weak economic conditions in a number of CAIC’s operating territories continue to put pressure on profit margins and business retention.
This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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