BF&M’s ratings affirmed by AM Best
AM Best has affirmed the credit ratings of island insurer BF&M Ltd.
Three of the group’s operating companies — BF&M General Insurance Company, BF&M Life Insurance Company and Cayman-based Island Heritage Insurance Company — retain their financial strength rating of A (excellent).
The Barbadian subsidiary, Insurance Corporation of Barbados, maintains its A- financial strength rating.
AM Best has a stable outlook for all ratings.
John Wight, chief executive officer of BF&M Ltd, said: “These ratings remain the strongest of any domestic insurance group operating in Bermuda and the Caribbean. They form the cornerstone of our promise to pay and to be there for our policyholders over the long term.”
The ratings of BF&M Life, BF&M General and Island Heritage are supported by risk-adjusted capitalisation “at the strongest level”, Best commented.
“The quality of the group’s capital has been driven by a trend of positive net gains, as well as support from its diversified product portfolio and geographic operations,” the agency added.
However, Best noted that “the group’s capital position and earnings were negatively affected by a sizeable writedown of a large commercial mortgage loan and subsequent need for reserve strengthening during 2017”.
Best added: “While AM Best has some concerns regarding BF&M’s low-liquid Bermuda commercial mortgage holdings, the overall exposure to this asset class has declined over the years.
“The core results in 2017 added a favourable offset to losses incurred from property business in the Cayman Islands, and BF&M’s use of reinsurance and its approach to risk management also contributed to mitigating financial impact [of last year’s hurricanes in the Caribbean] to the group.”