MEXICO CITY: AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Redbridge Insurance Company Limited (RICL) of Barbados.

The outlook of these Credit Ratings remains stable. The ratings reflect RICL’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings also reflect the company’s strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and sound business strategy, as well as its experienced management team. Partially offsetting these positive rating factors are the small size of the company, and the competitive environment in which it operates, which could pressure future growth and underwriting performance.

Most members of the management team have worked together for many years in developing and expanding RICL, which has achieved significant growth in recent years.

RICL’s main line of business is health insurance, with a complete network of operations that has enabled growth in the Latin American and Caribbean markets. As of December 2019, RICL’s portfolio was comprised 92% by health, 7% by life and 1% other; it is diversified geographically among 28 countries in the Caribbean and Latin America, with a larger concentration in Mexico (27.2%).

The continuing improvement in RICL’s risk-adjusted capitalization is mainly a result of two USD 1 million capital contributions in 2019. In addition, the company’s balance sheet strength is reinforced by its reinsurance program placed with reinsurers, with an excellent level of security. Nevertheless, the concentration in one particular reinsurer limits AM Best’s view of RICL’s balance sheet strength. Additional capital contributions will be key for the future balance sheet strength assessment.

RICL’s overall underwriting results have improved from the past years, and combined ratios have remained below the 100% threshold. In addition, RICL’s prudent underwriting practices have maintained the loss ratio at stable levels. As of December 2019, RICL increased its retention gradually but continued underwriting a healthy business volume with respect to its growing capital base, which helped further reduce the company’s underwriting leverage ratios.