NASSAU, BAHAMAS- The global insurance industry’s top rating agency, AM Best, has reaffirmed the creditworthiness and financial strength of Colina Insurance Limited (Colina).
AM Best has affirmed Colina’s Financial Strength Rating of B++ (Good) and its Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” (Good). Additionally, AM Best has affirmed the Long-Term ICR of “bb+” (Fair) for Colina Holdings Bahamas Limited (CHBL). Both companies are domiciled in Nassau, Bahamas. The outlook for these Credit Ratings is stable.
The ratings reflect Colina’s strong balance sheet, as assessed by AM Best, as well as its solid operating performance, neutral business profile, and appropriate enterprise risk management (ERM).
AM Best noted: “Due to exchange control limitations, Colina has very limited investment options to optimize asset-liability matching, other than the Bahamas’ sovereign debt instruments, resulting in a high concentration of these holdings on Colina’s balance sheet. As a result, following the 2022 downgrades of the Bahamas’ sovereign debt ratings, Colina’s balance sheet strength assessment reflects a very weak level of risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR). These factors are offset by good liquidity and increasing regulatory and absolute capital levels. The company’s operating performance continues to be assessed as strong, with consistently positive operating earnings and minimal impact to operating earnings resulting from external events (e.g., COVID-19, weather-related events, downgrade of Bahamian debt) in recent years.”
Colina’s business profile is strengthened by its position as a market leader in the Bahamas and its low-product-risk liability offerings. However, these strengths are somewhat offset by the company’s geographic concentration in the Bahamas. Its ERM framework and governance structure are considered appropriate for its risk profile.
Concerns remain regarding the continued impact of global economic conditions on the Bahamas. AM Best will continue to monitor these conditions and will take appropriate rating actions as the situation evolves.
