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OLDWICK, N.J., November 13, 2018
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Summit Insurance Company Limited (Summit)
(Nassau, Bahamas). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Summit’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The ratings also take into consideration the highly competitive property/casualty insurance market conditions in the Bahamas, the company’s elevated gross exposure to natural catastrophes and the moderate country risk of The Bahamas. The balance sheet strength is at the strongest level based on supportive risk-adjusted capitalization, favorable earnings, which have been accretive to surplus growth, and the extensive use of reinsurance to reduce Summit’s net exposure to natural catastrophes such as hurricanes.
Overall operating performance has been strong and profitability ratios have been better than its peer group. However, the business profile is considered limited due to Summit’s geographic and product line concentration. This exposes the company to highly competitive soft pricing conditions, moderate economic and political risk, elevated financial
system risk, as well as changes in the underwriting cycle and the potential for significant losses from severe weather-related events.
The outlook is stable as A.M. Best anticipates that Summit will be able to maintain its balance sheet strength through continued strong earnings and effective use of reinsurance. The ratings could be impacted either positively or negatively by changes in The Bahamas’ country risk tier ranking. The ratings also may be negatively impacted by a material weakening in Summit’s risk-adjusted capitalization or a weakening in overall profitability
or underwriting performance to a level that trails similarly rated peers.