AM Best Affirms Credit Ratings of International Traders Insurance Co., Ltd.

AUGUST 01, 2024 02:34 PM (EDT)

AM Best Affirms Credit Ratings of International Traders Insurance Co., Ltd.

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FOR IMMEDIATE RELEASE

MEXICO CITY - AUGUST 01, 2024 02:34 PM (EDT)
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" (Excellent) of International Traders Insurance Co., Ltd. (ITICO) (Turks and Caicos Islands, British West Indies). The outlook of these Credit Ratings (ratings) is stable.

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

The ratings also reflect the company's strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), supported by its consistent historical profitability. Partially offsetting these positive rating factors is the inherent execution risk of ITICO's expansion and diversification initiatives.

ITICO is a reinsurance company with 40 years of experience in the sector. The company is domiciled in the Turks and Caicos Islands, and has representative offices in Panama and Colombia, through which it provides clients access to the Latin America and Caribbean markets. ITICO is owned by a pure holding company that is domiciled in the Cayman Islands.

Within the reinsurance market, ITICO stands out for its commercial relationships with the ceding companies and the structuring of reinsurance programs based on clients' needs.

As of December 2023, ITICO's business portfolio was mainly composed of fire (51%), with 16% from group life, and the rest in other business lines. In addition to Panama, the company is diversified geographically in 37 other countries, mainly across Latin America and the Caribbean.

ITICO's risk-adjusted capitalization stands at the strongest level for historical and projected years, as measured by BCAR, due to its conservative investment base, low retention profile and a good quality of capital. Conversely, management is prone to use its capital efficiently, which might lead to dividends going forward.

The company's overall results are characterized by sustained profitability, despite fluctuations in its volume of gross written premium. ITICO's loss ratio has remained contained due to its prudent underwriting practices. The company's investment income has showed a stable trend, moderately supporting ITICO's income generation.

Factors that could lead to positive rating actions include the continued growth of the company's capital base in the medium term, supportive of the strongest level of risk-adjusted capitalization, as measured by BCAR, and successful consolidation of company's business strategy in targeted locations, while maintaining strong operating performance. Negative rating actions could occur if premium growth or changes in the investment or its underwriting risk profile reduce risk-adjusted capitalization to a level that no longer supports the ratings. Negative rating actions may also occur if ITICO's business strategy has an unfavorable development and increases concentration risk, or if there is a shift in the company's operating performance metrics to levels no longer consistent with the strong assessment level.

The methodology used in determining these ratings is Best's Credit Rating Methodology (Version Jan. 18, 2024), which provides a comprehensive explanation of AM Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology .

Key insurance criteria reports utilized:

· Evaluating Country Risk (Version June 6, 2024)

· Understanding Global BCAR (Version March 7, 2024)

· Catastrophe Analysis in AM Best Ratings (Version Feb. 8, 2024)

· Available Capital and Insurance Holding Company Analysis (Version Jan. 18, 2024)

· Scoring and Assessing Innovation (Version Feb. 27, 2023)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best's Credit Ratings.

· Previous Rating Date: Aug. 2, 2023

· Initial Rating Date: July 19, 2021

· Date Range of Financial Data Used: Dec. 31, 2019-Dec. 31, 2023

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While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company's financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

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