A.M. Best Co. has affirmed the financial strength rating of “A-” (Excellent) of the Bahamas-based RoyalStar Assurance Limited with a stable outlook.
“The rating reflects RoyalStar’s solid capitalization, generally favorable operating results and well established presence in the Caribbean market,” said Best. “These attributes are supported by management’s commitment to effective control systems, a strong reinsurance program and knowledge of local markets. RoyalStar provides personal and commercial lines coverage through a network of agents and brokers throughout the Bahamas, Cayman Islands and Turks & Caicos Islands. In the Bahamas, the company operates from offices in Nassau and Freeport.”
However, Best noted that “RoyalStar’s exposure to hurricane activity in the region, which presents a substantial level of risk exposure to RoyalStar and other insurers,” partially offsets the positive attributes.
But, Best also indicated: “The level of catastrophe risk is mitigated by the company’s efficient reinsurance program, which protects capital from both frequency and severity of events. Furthermore, the Caribbean insurance market has become increasingly competitive as indigenous insurers are challenging more established companies to gain market share.”
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