JIIC withdraws from AM Best rating process
JAMAICA International Insurance Company (JIIC) plans to withdraw from being rated by international financial rating agency AM Best.
The general insurer said changes in the local economic environment prompted the decision.
In particular, the expected reduction in investment income as a result of the National Debt Exchange (NDX) would impact JIIC’s present B++ rating.
“Consequent on the several changes in the external environment, primarily the impact of the NDX on the country’s assessment, JIIC has decided to withdraw from participation in the AM Best rating process at this time,” said the company in a press release issued on Monday. “The rating of the country in which a company operates and the ability to consistently show underwriting profit are key variables in determining an insurance company’s rating.
“While the NDX is not expected to have a significant impact on JIIC, there will be a short-term reduction in profitability.”
The company emphasised that it consistently meets the regulatory requirements of the Financial Services Commission, including the new capital threshold that came into effect on January 1, 2013.
It had total equity of $2.1 billion and assets of $7.1 billion as at January 31.
“JIIC continues to be well capitalised,” said the insurer. “In addition, JIIC enjoys the support and commitment of its parent GraceKennedy Limited, one of the leading conglomerates in the Caribbean.”
The insurer plans to focus on “the strategic re-positioning of its core business in order to ensure strong and consistent growth in underwriting profit through continued high levels of customer satisfaction coupled with cost containment and regional expansion”.
JIIC, like most general insurers, started to shift its reliance on investment income after the first debt exchange in 2010.
In 2011, the company posted $43 million in underwriting profit, following three consecutive years of losses — the insurer incurred $625 million in underwriting losses between 2008 and 2010.
