Home' Trinidad and Tobago Guardian : September 6th 2014 Contents A17
Saturday, September 6, 2014 www.guardian.co.tt Guardian
OLDWICK, NJ---AM Best has affirmed
the financial strength rating (FSR) of
A- (Excellent) and the issuer credit rat-
ings (ICR) of "a-" of Sagicor Life Inc
and Sagicor Capital Life Insurance Com-
pany Limited (both domiciled in St
AM Best has also affirmed the FSR of
A- (Excellent) and the ICR of "a-" of
Sagicor General Insurance Inc (Sagicor
General) (Bridgetown, Barbados), as well
as the FSR of B+ (Good) and the ICR of
"bbb-" of Sagicor Life Jamaica Limited
(SLJ) (Kingston, Jamaica). The outlook
for all ratings is stable.
In addition, AM Best has revised the
outlook to stable from negative and
affirmed the FSR of A- (Excellent) and
the ICR of "a-" of Sagicor Life Insurance
Company (Sagicor Life USA) (Austin,
Concurrently, AM Best has affirmed
the ICR of "bbb-" and the debt rating
of "bbb" on US$150 million, 7.5 per cent
senior unsecured notes, due 2016 of the
ultimate parent, Sagicor Financial Cor-
poration (SFC) (Barbados).
The outlook for these ratings is stable.
SFC is publicly traded on the Barbados,
Trinidad and London Stock Exchanges.
The rating affirmations reflect the
organisation's adequate capitalisation,
consistent earnings in its core life insur-
ance segments and strong brand recog-
nition in the Caribbean marketplace.
The organisation's consolidated earn-
ings performance, excluding losses from
its discontinued lines of business at its
European operations (which have been
sold), have been consistently positive.
Given SFC's diversified geographical reach and
product offerings, it enjoys a strong competitive
market position throughout the Caribbean region.
Supported by profitable operations, SFC's risk-
adjusted capitalisation remains adequate, including
its business risk exposures in its Jamaican oper-
ations. Offsetting rating factors include SFC's
significant business and financial exposure to the
Jamaican economy through its controlling interest
in SLJ and emerging country risks in Barbados.
While AM Best believes such exposures are
partially mitigated by the sustained favorable per-
formance of SFC's Jamaican operations, somewhat
stabilised financial condition in Jamaica and geo-
graphic diversification in the Caribbean region,
further deterioration in Jamaica or Barbados'
financial condition could potentially stress SFC's
overall operating results.
Additionally, SFC faces ongoing challenges to
sustain earnings and premium growth from its
core mature Caribbean life/health insurance mar-
The outlooks for the ratings of Sagicor Life
USA were changed from negative to stable due
to its improved statutory operating performance
in both the life and annuity lines of business.
Although annuity growth has pressured his-
torical earnings, Sagicor Life USA entered into a
reinsurance agreement and lowered production
in order to reduce the capital strain associated
with its annuity business growth.
In addition, the company continues to maintain
an adequate level of risk-adjusted capital, mainly
from parental support rather than organic growth
However, given that historical support was
mainly in the form of internal surplus notes, sur-
plus notes constitute more than half of its capital
and surplus position.
Sagicor General is among the largest
property/casualty insurers in Barbados and has
a significant presence in T&T, Dominica, St Lucia
Sagicor General has continued to produce pos-
itive overall operating results, which are derived
from its sound underwriting performance in con-
junction with a steady stream of investment
The company also benefits from the synergies
derived as a subsidiary of SFC.
The enterprise's overall leverage position is
within AM Best's expectations for its current
rating level. In addition, diversified sources of
cash and profitable operations provide adequate
coverage to service its debt obligations.
While positive rating movement is unlikely over
the near to medium term, factors that could lead
to negative rating actions include a decline in
SFC's earnings and capital, erosion in the eco-
nomic conditions in the countries in which SFC
operates, particularly Jamaica and/or Barbados,
or further deterioration in the credit quality of
SFC's asset portfolio.
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
AM Best Company is the world's oldest and
most authoritative insurance rating and informa-
tion source. (BUSINESS WIRE)
AM Best affirms stable ratings of Sagicor
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