A.M. Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “A-” of Summit Insurance Company Limited (Summit) (Nassau, Bahamas). The outlook for 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 adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings also consider Summit’s conservative investment policy, high liquidity and effective risk management procedures that include an appropriate reinsurance program developed to mitigate exposure to natural catastrophes. Summit’s capital position is enhanced by investment income and organic surplus growth achieved from profitable underwriting results.
The business profile is limited mainly due to the company’s geographic concentration within the Bahamas, which exposes them to moderate economic, political and financial system risk. Summit also has significant exposure to natural catastrophes in the Caribbean and high dependence on reinsurance. Additionally, the continuing soft market conditions and high competition in the Bahamas remain obstacles for growth. However, the recent hurricane activity, although not affecting the Bahamas directly, has led to a harder reinsurance market in the Caribbean, and rates are expected to trend upwards for the next 12 months.
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