Insurance Corporation of Barbados Limited (ICBL) has received another top international rating for its business operations, but the local company has also been warned about possible risks it could face.
In its latest assessment of the island’s largest general insurance company, A.M. Best Co., said ICBL had a financial strength rating of A- (excellent) and an issuer credit rating of A-, while the outlook was projected as “stable”.
According to the international rating agency which specializes in assessing the strength of insurance companies, “ICBL has excellent brand-name recognition.”
“ICBL has achieved favourable underwriting results in recent years through prudent risk selection and underwriting discipline.
“Underwriting profitability has been augmented by consistent levels of investment income, and this has enabled the company to continue to enhance its capitalization.”
A.M. Best also touted ICBL’s affiliation to its parent company BF&M of Bermuda, noting that this relationship afforded ICBL access to the group’s financial resources and expertise.
At the same time, the rating agency with offices in the United States, Britain and Hong Kong said the top local insurance company’s rating was offset by the danger of ICBL’s concentrating so much of its business in Barbados.
A.M. Best warned about the “increasingly competitive market in which the company operates”, adding, “ICBL, like other regional insurers, has significant exposure to catastrophic losses.”
But in a note of approval, A.M. Best said ICBL “manages this risk through the utilization of reinsurance to limit its catastrophe exposure to a manageable level and protect its surplus against frequency of events”.
The agency said factors that could affect ICBL’s top rating negatively “include significant loss of market share, continued decline in underwriting profitability and substantial deterioration in risk-adjusted capitalization as measured by A.M. Best’s capital model”.
