AM Best has affirmed the A financial strength rating for the BF&M group of companies.

The company’s interests extend into the Caribbean and John Wight, BF&M’s chief executive officer, was pleased with the rating affirmation after a destructive storm season in several of the islands where the insurer does business.

AM Best cited strong risk-adjusted capitalisation, a long-term trend of shareholder equity growth, and favourable earnings resulting from the companies’ strategy of diversification by geography and lines of business.

Mr Wight said: “These ratings remain the strongest of any domestic insurance group operating in Bermuda and the Caribbean.

“They are particularly meaningful having been issued following the unprecedented storm activity across the Caribbean region.”

The BF&M General Insurance Company Ltd, the BF&M Life Insurance Company Ltd and Cayman-based Island Heritage Insurance Company Ltd all kept their A financial strength ratings, while the Insurance Corporation of Barbados Ltd maintained its A- rating.

Other contributing factors included a stable market share in the core market of Bermuda, the consistently strong performance of the group health segment, positive property/casualty earnings, and the additional benefit of smaller lines of business such as pension administration, group life and reinsurance.

However, AM Best added that offsetting rating factors included losses from the hurricanes in Caribbean territories, a lack of favourable economic trends and heavy competitive pressure.

“AM Best expects the overall effect of the recent catastrophe event losses on BF&M’s consolidated results to produce a sizeable decline in 2017 compared with prior years, where Island Heritage is expected to sustain net losses after all reinsurance claims are settled,” AM Best said.

“In addition, despite some incremental improvement in economic growth tied to Bermuda’s participation in the America’s Cup, economic conditions in Bermuda remain challenging.

“The long-term trend of population decline may shrink health and property markets. All three major competing Bermudian companies write the same lines and pricing is transparent, therefore they mainly compete on service and quality.”