AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good) to MTM Assurance Ltd. (MTM) (Barbados). The outlook assigned to these Credit Ratings (ratings) is stable.

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

MTM is a niche insurer operating out of Barbados where it provides revenue loss reinsurance for a limited number of financial services industry partners, which are primarily located in the Canadian market. AM Best’s balance sheet strength assessment of very strong is supported by the company’s risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). MTM’s capital is accreted through its retained earnings with an offset to its projected growth of modest dividends paid up to its shareholders.

The company has good liquidity with approximately one fifth of its invested assets held in cash and short-term fixed investments. However, about two thirds of investments are private loans, which elevates balance sheet asset risk. With its limited claims experience, MTM’s operating results have been robust for fiscal-year 2024 and near-term results indicate a continuation of this trend. Management maintains strong oversight of operations and has extensive knowledge of its business segment, which contributes to the company’s operating stability. In coordination with a third party, the company has developed a process for risk identification, documentation and reporting, as well as for modeling and pricing risk management.

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