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FOR IMMEDIATE RELEASE
MEXICO CITY - MAY 29, 2020 10:55 AM (EDT)
AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Redbridge Insurance Company Limited (RICL) (St. James, Barbados). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect RICL’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings also reflect the company’s strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and sound business strategy, as well as its experienced management team. Partially offsetting these positive rating factors are the small size of the company, and the competitive environment in which it operates, which could pressure future growth and underwriting performance.
RICL is an insurance and reinsurance company founded in December 2010, and part of Redbridge Holding, Inc., a company specialized in the management of insurance and reinsurance. Most members of the management team have worked together for many years in developing and expanding RICL, which has achieved significant growth in recent years.
RICL’s main line of business is health insurance, with a complete network of operations that has enabled growth in the Latin American and Caribbean markets. As of December 2019, RICL’s portfolio was comprised 92% by health, 7% by life and 1% other; it is diversified geographically among 28 countries in the Caribbean and Latin America, with a larger concentration in Mexico (27.2%).
The continuing improvement in RICL’s risk-adjusted capitalization is mainly a result of two USD 1 million capital contributions in 2019. In addition, the company’s balance sheet strength is reinforced by its reinsurance program placed with reinsurers, with an excellent level of security. Nevertheless, the concentration in one particular reinsurer limits AM Best’s view of RICL’s balance sheet strength. Additional capital contributions will be key for the future balance sheet strength assessment.
RICL’s overall underwriting results have improved from the past years, and combined ratios have remained below the 100% threshold. In addition, RICL’s prudent underwriting practices have maintained the loss ratio at stable levels. As of December 2019, RICL increased its retention gradually but continued underwriting a healthy business volume with respect to its growing capital base, which helped further reduce the company’s underwriting leverage ratios.
Positive rating actions could occur if the company’s risk-adjusted capitalization further strengthens as a result of capital contributions, or from significant improvement in its bottom-line results. Negative rating actions could occur if premium growth or deteriorating underwriting results erode the company’s capital base and reduce risk-adjusted capitalization to a level that no longer supports the ratings.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology .
Key insurance criteria reports utilized:
View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Guide to Best’s Credit Ratings.
This press release relates to rating(s) that have been published on AM Best’s website. For additional 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.
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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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.