AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Trinidad & Tobago Insurance Limited (TATIL) (Trinidad and Tobago). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect TATIL’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

TATIL maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by operating results that have generally been accretive to capital, a conservative investment portfolio and a prudent reinsurance structure to guard against material catastrophe events. TATIL has grown shareholder’s equity organically despite consistent dividend payments to its immediate parent, ANSA Merchant Bank Limited. Capitalization is protected by a conservative reinsurance program with highly rated reinsurance partners to effectively guard against catastrophe losses in its property book. The organization’s investment portfolio is managed by its parent, ANSA Merchant Bank Limited, and predominantly composed of high credit quality fixed income instruments, managed equity funds, local individual equities and cash and short-term securities.

AM Best assesses TATIL’s operating performance as strong, although the company’s performance ratios have trended unfavorably in recent years due to unrealized investment losses, heightened claims activity, and some one-off expenses, such as the acquisition of Colonial Fire and General Insurance Company Limited (Colfire) in 2023. Poor performance in TATIL’s health segment in 2022 and in its motor segment in 2023 due to increased frequency of accidents, supply chain price increases in car parts and cost of repairs, and competitive pricing in the local market were the primary drivers of increased claims experience. The organization implemented corrective actions to remediate performance in both segments. AM Best will monitor the integration of Colfire as management expects to materially benefit from the synergies provided by the acquisition.

The purchase of Colfire will enhance the organization’s already strong market position in Trinidad and Tobago. However, TATIL’s business profile is assessed as limited due to geographic concentration of business in Trinidad and Tobago. While the company also maintains operations in Barbados, approximately 70% of gross premiums are derived from Trinidad and Tobago. Furthermore, TATIL is exposed to elevated regulatory risk in Trinidad and Tobago and Barbados.

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