AM Best Affirms Credit Ratings of Caribbean Alliance Insurance Company Limited

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Caribbean Alliance Insurance Company Limited (CAIC) (Antigua and Barbuda). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect CAIC’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

CAIC maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by consistent earnings generation, a highly liquid investment portfolio and a conservative reinsurance structure to protect against catastrophe losses. Capital accumulation has persisted despite elevated exposure to catastrophe risk and several dividend payments in recent years. CAIC has higher dependence on reinsurance than peers because of its lower levels of retention; however, this risk is mitigated using diversified reinsurance panels and high credit quality partners. CAIC’s investment portfolio is composed primarily of cash and short-term deposits in various currencies, emphasizing the organization’s focus on liquidity rather than yield. Thus, operating results are driven by prudent underwriting and supplemented modestly by investment income. Although operating results in 2022 were favorable, they declined relative to the previous year due to elevated reinsurance costs and a material foreign exchange loss. Overall, CAIC has generated consistently positive operating income and its combined ratio historically has compared favorably to its Caribbean peers. For 2023, CAIC faced significant increase in reinsurance costs, which is in line with market trends. However, that is offset partially through rate increases and materially higher investment income due to the changed interest rate environment.

AM Best assesses CAIC’s business profile as neutral. The company is a market leader in the majority of its 16 operating territories, primarily writing personal and commercial property and motor business, and benefits from strong brand recognition. Geographic diversification allows the company to balance exposure to catastrophe and regulatory risks as well as various economic fluctuations. CAIC gradually has been expanding its branches through buyouts of well-performing agency partners in territories it serves. In the current environment, business growth is constrained by reinsurance capacity and CAIC is being careful in its risk selection with renewals and new business. In addition, competition remains intense with multiple local and regional players vying for business.

AM Best considers CAIC’s ERM program to be appropriate for company’s risks. Over the past several years, CAIC has enhanced its ERM through implementation of formal risk protocols and strengthening the governance process throughout the organization.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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