AM Best Affirms Credit Ratings of Gulf Insurance Limited

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Gulf Insurance Limited (Gulf) (Trinidad and Tobago). The outlook of these Credit Ratings (ratings) is stable.

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

The balance sheet strength assessment is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). While Gulf’s absolute capital is considered modest, its favorable earnings have been accretive to capital. Gulf maintains a conservative reinsurance program with high-quality reinsurance partners. However, the company has a high dependence on reinsurance to manage capital exposure to catastrophe events, as is typical of Caribbean insurers. The company’s invested asset portfolio is conservative and comprised mainly of investment-grade fixed income securities and cash and cash equivalents. However, a large portion of the bond portfolio is comprised of Trinidad & Tobago government issues. Additionally, some degree of financial flexibility is provided by the support of Gulf’s ultimate parent, Assuria, N.V., a leading financial services firm domiciled in Suriname. Despite a challenging macroeconomic environment in Suriname, Assuria N.V. has demonstrated the ability to grow its operations, retain capital, and support its subsidiaries.

Gulf’s operating performance is considered strong. The company has generated favorable underwriting gains in each of the past five years. Underwriting income declined in 2023 due to the combination of a higher loss ratio in its motor portfolio and excess expenses from the transition to IFRS-17 accounting standards. The higher loss ratio in the company’s motor book has been a trend in the Caribbean market due to inflationary pressures on the cost of repairs. Earnings are expected to improve for full year 2024 based upon interim results.

Gulf’s business profile is considered limited. While the company offers a range of insurance products, including property, motor and marine across eight territories, the company is exposed to geographic concentration risk as more than half of its gross insurance revenue is derived from Trinidad and Tobago.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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