BF&M Limited, a leading domestic Bermuda insurer, has been given a glowing report by one of the leading ratings firms assessing the financial viability and flexibility of insurers.

Yesterday, BF&M's 'A' financial strength rating was affirmed by A.M. Best Co. on the merits of the company's substantial market share in the Bermuda healthcare market, track record, capitalisation, purchase of reinsurance and strength of management.

The rating has been assigned a stable outlook, indicating little chance of change. The opinions of A.M. Best are heeded by many insurance buyers.

BF&M is the largest domestic property/casualty insurer, when judged by gross policy sales, A.M. Best said.

The ratings firm, in a public release, said BF&M's focus on buying significant reinsurance to lessen the chance of large losses was also a positive, and kept the company from sustaining large net losses from Hurricane Fabian, a powerful storm striking Bermuda in September 2003.

In Bermuda, healthcare coverages must be provided by Bermuda companies, which A.M. Best cited as another advantage for BF&M. A.M. Best added that the Bermuda legal system also mitigates litigation risks for BF&M.

Last year, BF&M expanded its business outside of Bermuda with the purchase of 51 percent of the Insurance Corporation of Barbados Limited, a step that A.M. Best said "greatly increases the group's premium volume, but simultaneously diversifies its exposure to hurricanes".

Also last year, Bermuda International Insurance Services Limited was created to market life insurance solutions to affluent individuals on a global basis, thus broadening the group's life insurance base.

A.M. Best said that BF&M's business advantages are partially offset by dependence upon the "insular and mature Bermudian economy, which limits the prospects for growth of the domestic insurance market".

"Ultimately, many factors related to the issue of economic scarcity are inherent in Bermuda's economy and lead to high expense loads across all lines of business. BF&M also remains highly susceptible to catastrophe events because of Bermuda's geographic location."