A.M. Best Co. announced that it has affirmed the financial strength rating of “A-” (Excellent) of United Insurance Company Limited (Bridgetown, Barbados) with a stable outlook.
“The rating reflects United’s solid capitalization on a risk-adjusted basis, consistently favorable underwriting performance, strong market profile and conservative reinsurance protection,” said Best. “United is a Barbados-based multi-island insurer of personal and small commercial lines throughout the Caribbean. Prudent underwriting strategies along with conservative risk management have resulted in consistent underwriting profit over the past several years.”
Best noted that the company’s “conservative selection of risks and comprehensive reinsurance programs have protected its capital from catastrophe losses prevalent in the region. Despite record hurricane activity in 2004 resulting in incurred gross losses due to Hurricane Ivan totaling $25 million, United managed to post strong earnings for the year due to the favorable performance of its motor lines of business and investment portfolio as well as release of reserves from its captive reinsurer.”
Best also indicated, however that “United’s continued exposure to catastrophic events and the competitive market conditions in the Caribbean” constitute partially offsetting factors. “Hurricane activity in the region has become more frequent in recent years and presents substantial risk exposure to the company and other insurers in the region,” Best continued.
In United’s case, however, Best said its catastrophe risk exposure is mitigated by the company’s “extensive reinsurance program. Furthermore, United operates in a challenging Caribbean insurance market, which has become increasingly competitive as indigenous insurers expand to new territories challenging established companies to maintain market share.”