Best affirms Colonial ratings after review
AM Best has affirmed the credit ratings of Colonial Group after a review sparked by losses related to Hurricane Dorian.
The rating agency said today it had removed the Bermudian-based insurer’s A financial strength rating from under review with developing implications after determining that the impact of Dorian on Colonial’s Bahamas subsidiary would be “minimal”.
AM Best said it would also monitor the potential impact of the Bermuda Government’s healthcare reforms on the company.
“Colonial Group’s primary operating market is Bermuda, where it has strong brand recognition and competes for business among the top insurance writers on the island,” AM Best commented.
“However, the operating disruption of the organisation’s Bahamian business and the catastrophic damages caused by Hurricane Dorian prompted an AM Best response to place the property and casualty companies and Colonial Group under review with developing implications, along with other market participants with businesses domiciled in the Bahamas.
“AM Best has since evaluated the loss estimates and related reinsurance contracts of Security and General Insurance Company Ltd, the Colonial Group entity primarily affected by the storm damage.
“The financial exposure to Colonial Group is within its current reinsurance contracts, and the net impact to the organisation is anticipated to be minimal.”
The ratings reflect Colonial Group’s balance sheet strength, which AM Best categorises as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management, AM Best commented.
“The earnings of Colonial Group have been subject to fluctuations over the past five years, where the primary driver of losses has been from its property business, and its health business has added stability,” the rating agency added.
“AM Best has factored into the ratings this stability, but notes the potential disruption from health reform in the Bermuda jurisdiction may result in pressure to garner earnings should further revisions to the nation’s health reform affect the competitive health insurance market landscape.”
Family set to lose home over loan guarantee
Woman to pay $7,500 for damaging 16ft boat
Homeless crisis a threat to children
Call to set up child rights commission
Robinson’s ‘pepper-mist’ comments resurface
Bermuda agony after epic Mexican stand-off
Paralysed man to spread road safety message
Man stabbed during Warwick break-in
Canadian admits faking bank cards
Top diamond firms back pioneering exchange
Take Our Poll