A.M. Best Co. has affirmed the financial strength rating (FSR) of B++ (Good) and downgraded the issuer credit rating (ICR) to “bbb” from “bbb+” of Colonial Life Insurance Company (Trinidad) Limited (CLICO) (Trinidad & Tobago). The outlook for both ratings is stable. CLICO is an insurance member company of CL Financial Limited, a diversified holding company based in Trinidad and Tobago.
The affirmation of CLICO’s FSR reflects its dominant market share in the group and individual pensions business primarily in Trinidad and Tobago, significant growth in its asset base and stockholders’ equity, continuing positive net income trends, strong brand name recognition in Trinidad and Tobago and its niche focus on mutual funds and investment management businesses.
The downgrading of CLICO’s ICR reflects its continued high exposure to affiliated investments. As part of its investment strategy, CLICO maintains a high concentration in related party assets, including large holdings in the banking and financial services, energy and manufacturing sectors. While these assets have continued to perform well, A.M. Best has concerns with the liquidity of CLICO’s non-quoted affiliated assets as part of its asset liability matching program. CLICO also has experienced rapid growth in its annuity and pension lines of business.
Additionally, the downgrading of the ICR reflects A.M. Best’s belief that despite management’s recent efforts to diversify away from affiliated investment holdings and related party transactions, this may be a medium to long-term process before CLICO achieves a reasonable level of related party investment exposure.
For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
Contacts:
Analysts:
Joseph McGowan, 908-439-2200, ext. 5225
joseph.mcgowan@ambest.com
or
Raj
Shah, 908-439-2200, ext. 5409
raj.shah@ambest.com
or
Public
Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle
Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
