OLDWICK, NJ–(BUSINESS WIRE)–am the best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) from Summit Insurance Company Limited (Summit) (Nassau, Bahamas). The outlook of these credit ratings (ratings) is Stable.
The ratings reflect Summit’s balance sheet strength, which AM Best rates as the strongest, as well as the company’s strong operating performance, limited business profile and adequate risk management.
Summit’s balance sheet strength is rated at the strongest level based on the strongest rated risk-adjusted capitalization as measured by Best’s capital adequacy ratio (BCAR), the conservative investment portfolio that consists primarily of cash and short-term assets, and the firm’s utilization of quality reinsurers, um Reduce its net exposure to natural catastrophes, particularly wind events. The organic growth of the surplus over the years has been achieved through favorable returns.
AM Best rates Summit’s overall operational performance as strong. In recent years, however, operating metrics have deteriorated towards the lower end of what is considered strong as higher reinsurance rates and claims costs weigh on underwriting. Underwriting pressure reflects the operating environment in the Bahamas, where competition is intense, reliance on reinsurance is very high and primary market prices are currently weak on a historical basis. Management has taken action to restore historical operating performance and in the nine months of 2022 the underwriting results are significantly above those of the previous year. The high geographic concentration and competitive pressures are also reflected in the limited assessment of the Company’s business profile, which also reflects the Bahamas’ high economic and financial system risk and moderate political risk.
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