Aug 2010 Financial News

Credit rating agency rates JIIC 'good' for financial strength

Aug 18, 2010

Credit rating firm, A M Best Co, has affirmed the financial strength of Jamaica International Insurance Company Limited (JIIC) due to its "favourable capitalization, historical profitability and financial flexibility as a result of the support and commitment of its parent, GraceKennedy Limited". The outlook for both ratings is stable.

The ratings assigned to the local general insurer were rating of B++ (Good) for JIIC's financial strength and issuer credit rating of "bbb".

"Historically, JIIC has reported consistent overall earnings as a result of its conservative operating strategies and steady investment income," said a press release issued by the rating agency on Monday. "This has enabled the company to consistently enhance its capital position, and it continues to maintain adequate risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio (BCAR).

"As an integral member within the GK Group's financial services, JIIC enjoys strong parental support and commitment as evidenced by past capital contributions and its parent's stated willingness to make additional funds available should the need arise."

A M Best said that JIIC's lack of "geographic diversification, the continuing challenges in the Jamaican macroeconomic environment and the high cost of the company's reinsurance programme due to its dependence on reinsurance for earnings and surplus protection from catastrophic events" partially offset the positive ratings factors.

A M Best Company, which was founded in 1899, is a global full-service credit rating organisation dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.


Source:
Jamaica Observer
Wednesday August 18, 2010

http://www.jamaicaobserver.com/business/Credit-rating-agency-rates-JIIC--good--for-financial-strength_7884080