NASSAU, BAHAMAS – AM Best has affirmed Family Guardian’s financial strength as well as the long term insurer credit rating of its BISX-listed parent, Fam Guard Corporation.
AM Best yesterday noted that it had removed the life and health underwriter from under review and affirmed its financial strength rating of A- (Excellent) and long-term Issuer credit rating of “a-“.
Concurrently, it also affirmed the long-term issuer credit rating of “bbb-” for its BISX-listed parent, FamGuard Corporation. The outlook for all credit ratings was stable.
“The ratings reflect Family Guardian’s balance sheet strength, which AM Best categorizes as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM),” AM Best stated.
It added: “These rating actions follow comprehensive assessments performed by the company of the financial impact to Family Guardian resulting from the devastation from Hurricane Dorian in September.
“While there was disruption to the company’s distribution, increased benefits and increases in policy lapses, the overall financial impact was limited. The most severe devastation of the storm occurred in the northern islands of Abaco and Grand Bahama where less than 15 percent of the company’s policyholders are located. The island of New Providence, where most of the population and businesses are located, was largely spared.”
The insurance rating agency noted that the insurer’s balance sheet strength assessment reflects “the very strong level of risk-adjusted capital, the absence of leverage, and good liquidity partly offset by the company’s limited investment options and high concentration of sovereign debt holdings”.
“The company’s mortgage loan portfolio had very limited impact due to the relatively low number of loans in the hardest hit areas and property insurance coverage requirements,” stated AM Best.
“Operating performance remains strong, with minimal impact to operating earnings resulting from the storm. AM Best expects consistent positive net earnings to continue to support capital growth in the near term. The business profile assessment considers Family Guardian’s good market position in the Bahamas and creditworthy product offerings offset by its geographic concentration in the Bahamas.
AM Best added: “The company’s ERM framework and governance structure are appropriate for its risk profile.”