AM Best Affirms Credit Ratings of Gulf Insurance Limited.

ENPNewswire-September 17, 2021--AM Best Affirms Credit Ratings of Gulf Insurance Limited

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Release date- 16092021 - AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long Term Issuer Credit Rating (Long-Term ICR) of 'bb' (Fair) of Gulf Insurance Limited (Gulf) (Trinidad and Tobago).

The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Gulf's balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The strong level of balance sheet strength is derived from the company's strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), adequate liquidity, and strategically conservative investment portfolio. However, the balance sheet assessment is limited due to the company's level of surplus. In addition, Gulf is highly dependent on reinsurance to mitigate losses and protect its surplus from the effects of weather-related catastrophes. Concerns persist relative to the macroeconomic and fiscal challenges faced by its ultimate parent Assuria N.V. (Assuria) (Suriname), and the potential financial strain that could be imposed on Gulf's balance sheet in the event that Assuria is impacted negatively.

Gulf's operating results in recent years have been supported by favorable underwriting performance, commission income derived from business ceded to reinsurers and investment income. Despite major economic headwinds in Gulf's operating territories due to the COVID-19 pandemic, the company produced overall earnings in 2020 as demonstrated by solid profitability ratios.

Gulf's business profile is considered limited due to the geographic concentration of risks in its domestic Trinidad and Tobago market and its significant product concentration in property and auto...

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