A.M. Best Affirms Credit Ratings of Trinidad & Tobago Insurance Limited

A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Trinidad & Tobago Insurance Limited (TATIL) (Trinidad and Tobago). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect TATIL’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

TATIL’s balance sheet strength assessment reflects the company’s strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), history of profitable overall operating performance that has grown shareholders’ equity and an effective reinsurance program that mitigates exposure to catastrophic loss events.

TATIL has consistently produced favorable underwriting results, which have been complemented by a stable level of investment income. A profitable overall earnings trend and relatively modest dividend requirements have contributed to surplus growth and a sustained solid level of risk-adjusted capitalization.

Partially offsetting these positive rating factors are the geographic concentration of TATIL’s operations, its continuing challenge to maintain overall earnings, and market share in extremely competitive markets and the inherent exposure to potential impact from exposure to catastrophe events.

TATIL’s strong operating performance is the result of consistent profitable earnings underpinned by favorable underwriting performance and investment income. Years of benign catastrophe loss experience have allowed TATIL to maintain a track record of favorable operating performance. Although TATIL has a solid regional business presence, its business profile is limited as it operates primarily in Trinidad and Tobago, as well as Barbados, which have moderate yet increasing levels of economic, political and financial system risk. Somewhat mitigating the catastrophe exposure is prudent catastrophe risk management, which limits exposure to natural catastrophe events, hence the appropriate ERM program. The catastrophe reinsurance program is backed by high quality reinsurers. Furthermore, the company operates in a region that has historically been less prone to hurricane activity. Notwithstanding, given the exposure of the company to catastrophe losses, prospective results are likely to remain subject to volatility.

While the rating outlooks are stable, positive rating factors include improvement in the Trinidad and Tobago country risk tier. Negative rating actions could occur if there is material weakening of the balance sheet strength, an unfavorable trend in operating performance or a downgrade of the Trinidad and Tobago country risk tier.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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