AM Best Upgrades Sagicor Financial Ratings
AM Best upgraded the financial strength and credit ratings of most Sagicor Financial subsidiaries while affirming its Bermuda and Jamaica operations with stable outlooks.
The ratings agency said, “AM Best has upgraded the Financial Strength Rating [FSR] to A [Excellent] from A- [Excellent] and the Long-Term Issuer Credit Ratings [Long-Term ICRs] to “a” [Excellent] from “a-” [Excellent] of most of the subsidiaries of Sagicor Financial Company Ltd. [Bermuda]. These subsidiaries — Sagicor Life Inc. and Sagicor General Insurance Inc. [both domiciled in St. Michael, Barbados], Sagicor Life Insurance Company [Austin, TX] and ivari [Toronto, Canada] — collectively are referred to as Sagicor Financial by AM Best and represent the organization’s Canadian, United States and a portion of the Caribbean operating companies.
“In addition, AM Best has upgraded the Long-Term ICR to “bbb” [Good] from “bbb-” [Good] and the Long-Term Issue Credit Rating [Long-Term IR] to “bbb+” [Good] from “bbb” [Good] of the $550 million, 5.3% senior unsecured notes, due 2028, of Sagicor Financial Company Ltd., the ultimate parent. Concurrently, AM Best has affirmed the FSR of A- [Excellent] and the Long-Term ICR of “a-” [Excellent] of Sagicor Reinsurance Bermuda Ltd. [SRBL] [Bermuda], as well as the FSR of B++ [Good] and the Long-Term ICR of “bbb+” [Good] of Sagicor Life Jamaica Limited [SLJ] [Kingston, Jamaica]. The outlook of these Credit Ratings [ratings] is stable.
“The ratings reflect Sagicor Financial’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management [ERM].
“AM Best views Sagicor Financial’s consolidated risk-adjusted capitalization as strongest, as measured by Best’s Capital Adequacy Ratio [BCAR], supported by diversified operational earnings from multiple subsidiaries. Financial flexibility is demonstrated via multiple debt issuances as well as a revolving credit line. Financial leverage and debt service coverage metrics support Sagicor Financial’s current ratings. Liquidity is adequate and in line with peers. The investment portfolio is conservative with a majority allocation to government and corporate bonds, alongside equity and commercial mortgage loans positions.
“Sagicor Financial’s strong operating performance is driven by a track record of consistently positive earnings spread over multiple subsidiaries and geographic areas including Canada, United States and the Caribbean. Premium growth has been steady with continued new business recorded at the consolidated level. Investment performance has also been strong with net yields that outperform peers. Overall volatility has slowly been decreasing driven by a more conservative investment portfolio and a larger asset base.
“Sagicor Financial’s neutral business profile reflects very strong market presences in the Caribbean and Canadian markets, as well as a captive agency force, which maintains strong business growth in multiple Caribbean territories. Sagicor Financial utilizes a large set of independent agents and independent marketing organizations in Canada and the United States. Offsetting these strengths is an elevated level of country risk which stems from Caribbean operations. ERM framework is appropriate for size and scale of the organization’s operations and includes proper subsidiary oversight and consistency in risk mitigation activities.
“In addition to the consolidated ratings at Sagicor Financial, two additional entities are rated for the Bermuda and Jamaica operations. The ratings of SRBL reflect its balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate ERM. SRBL optimizes group-wide capital and its ratings benefit from a capital maintenance agreement with Sagicor Financial Company Ltd.
“The ratings of SLJ reflect its balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and appropriate ERM. SLJ has a very strong market position in Jamaica and a consistent history of revenue and earnings, which has led to balance sheet growth. Offsetting rating factors include an elevated country risk level in Jamaica.”
