Local insurance firm retains A rating

| 30/05/2011

(CNS): Island Heritage Insurance Company, Ltd based in the Cayman Islands, has been given a stable outlook with ratings of A- (Excellent) for financial strength and issuer credit rating of “a-” by ratings agency AM Best. The firm said Monday, that the affirmation reflected its solid level of “risk-adjusted capitalization, favourable operating results, experienced management team and local market expertise.”  The firm said that despite being located in the Caribbean and facing the inevitable risk that come with hurricanes the losses from these inevitable natural events have been kept at a manageable level.

In a release in the wake of its positive ratings the firm said it was down to Island Heritage’s solid underwriting results and historically positive investment income, which have led to organic surplus growth in four of the last five years, as well as a strong five-year average combined ratio.

The firm boasted that its management team has extensive knowledge of each island and maintains effective risk management strategies. The company focuses on the unique needs of the Caribbean property owner and designs its programmes to provide the depth of cover needed.

In addition, the firm said its level of catastrophe risk is mitigated by its reinsurance program, which was enhanced significantly following the severe events of 2004 and 2005. The revised reinsurance structure protects the company’s capital from both the frequency and severity of events in a relatively more efficient and effective manner,” it stated in a release.
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Island Heritage CFO Jon Coleman said the AM Best ratings and outlook recognised the strengths of Island Heritage’s solid level of capitalization and enhanced reinsurance protection against severe and frequent catastrophic events. “On behalf of our management team I would like to thank our valued customers, esteemed business partners, supportive shareholders and dedicated staff for making Island Heritage Your Caribbean Insurer. With Island Heritage, Strength Delivers,” he said.

Island Heritage’s geographic concentration, substantial dependency on reinsurance, the competitive market and local regulatory risk offset some of the positive outlook but the firm said despite this losses are manageable because of the company’s extensive reinsurance program.

Although Island Heritage is heavily dependent on reinsurance, this risk is partially mitigated by the reinsurance capacity available from its majority owner, Flagstone Reinsurance Holdings SA.

 

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