Colonial Group International Ltd.'s life/health and property/casualty operating subsidiaries have been affirmed the financial strength ratings (FSR) of A- (excellent) and issuer credit ratings (ICR) of "a-" by AM Best Co.

The outlook for all ratings is stable.

Best has also withdrawn the FSR and ICR of Colonial Group, which were necessary to conform to the ratings agency's standard holding company rating methodology.

The rating affirmations reflect the operating subsidiaries' consistent increase in total consolidated equity, good risk-adjusted capitalisation 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 profitable trends over the past five years, with the exception of Colonial Life Assurance Co. Ltd., which has reported losses over the same period.

Colonial Medical Insurance Company Ltd. and Atlantic Medical Insurance Ltd. 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, while these subsidiaries' reinsurance leverage enables the company to manage its property/casualty risks, while growing direct premium revenues in their core markets.

Partially offsetting these strengths were 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.