Dec 2013 Financial News

Rating’s agency affirms Tatil’s financial strength

Dec 10, 2013

AM Best Co has affirmed the financial strength rating of A-(Excellent) and issuer credit rating of “a-” of T&T Insurance Ltd (Tatil) (Trinidad). The outlook for both ratings is stable, the ratings agency said in a statement.

“The ratings reflect Tatil’s history of profitable overall operating performance, solid capitalisation and the support it receives from its ultimate parent, Ansa McAL Ltd,” the statement said. Ansa McAL is one of the largest diversified companies in the Caribbean and is publicly traded on the T&T Stock Exchange, the agency told investors in the statement. Tatil has consistently produced favourable underwriting results, which have been complemented by a steady level of investment income, AM Best said.

“Stable overall earnings and relatively modest dividend requirements have allowed Tatil to grow surplus and maintain a strong level of risk-adjusted capitalisation. Additionally, Tatil has the support and commitment of Ansa McAL Ltd, benefitting from its synergies, along with access to its considerable resources, including information technology and financial and investment management services,” the agency said.

“Partially offsetting these positive rating factors is the geographic concentration of Tatil’s operations, its continuing challenges to maintain overall earnings and market share in extremely competitive markets and the potential impact from exposure to catastrophic events,” AM Best said. While the outlook for Tatil’s ratings is stable, positive rating actions could occur if the company outperforms its Caribbean peers, maintains strong capitalisation and/or there is an improvement in the T&T country risk tier, the agency said.

“Negative rating actions could occur if there is a material decline in Tatil’s risk-adjusted capitalisation or operating performance, outsized catastrophic losses when compared to peers and/or a downgrading of the T&T country risk tier,” the statement said.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.


Source:
Aleem Khan
Trinidad Guardian
Tuesday December 10, 2013

http://www.guardian.co.tt/business/2013-12-10/rating%E2%80%99s-agency-affirms-tatil%E2%80%99s-financial-strength