RATING DRIVERS
Supporting Factors
- Robust distribution network underpins strong market position
- Continued adequate capitalization
- Continued good asset quality
- Continued profitability with profitable underwriting operations
- Adequate information systems and risk management policies
Constraining Factor
- Challenging economic environment with constrained access to foreign exchange
Rating Sensitivity Factors
Factors that could, individually or collectively, lead to an improvement in the Ratings and/or Outlook include:
- An improvement in the credit rating of the Government of The Republic of Trinidad and Tobago
- Sustained growth in PAT by >15% over the next 2 years without impacting other financial health indicators like capital adequacy and asset quality.
Factors that could, individually or collectively, lead to a lowering of the Ratings and/or Outlook include:
- A further lowering of the credit rating of the Government of the Republic of Trinidad and Tobago
- A 2-notch deterioration of the credit rating of any of Colfire’s top 3 reinsurers by Standard and Poor’s Ratings Services
- A deterioration of the Company’s regulatory capital adequacy ratio below 150% over the next 12 months
- Loss of relationship with any of the Company’s major reinsurers due to issues relating to accessing foreign exchange
- A 15% fall in Motor Premium Income
COMPANY BACKGROUND
Colonial Fire Insurance Company Limited was founded by the late Mr. Cyril Lucius Duprey. It commenced operations in 1958 in Port of Spain, Trinidad, as a small, specialized company of qualified Underwriters. The Company’s name was amended in 1968 to Colonial Fire & General Insurance Company Limited (Colfire or the Company) to satisfy all general insurance needs in Property, Motor, Liability, Marine and Specialty insurance for both individual and institutional clients. The Company is currently 94.24% owned by CL Financial Limited, with the residual being held by several minority shareholders. In March 2021, CL Financial announced that it would accept bids for its shareholdings in Colfire, which currently remains up for sale. The Company derives 100% of its premium income from the Trinidad and Tobago (T&T) market. In addition, Colfire underwrites on average 7.5% and 14.1% respectively of total gross premiums and total motor insurance premiums in the T&T general insurance industry[1] and derived an average of 66.1% of its gross premium income from motor insurance over 2018-2020.
Colfire has one wholly owned subsidiary, Temple Properties Limited, a real estate company acquired in 2001 and incorporated in Trinidad & Tobago.
[1] Source: Central Bank of Trinidad and Tobago. Market information as at 31 December 2020.
Analytical Contacts:
Megan Dass
Tel: 1-868-627-8879 Ext. 239
E-mail: [email protected]
Keith Hamlet
Tel: 1-868-627-8879 Ext. 244
Cell: 1-868-487-8356
E-mail: [email protected]
Website: www.caricris.com
E-mail: [email protected]
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