RATING DRIVERS
Supporting Factors
- Continued stable financial performance
- Healthy capitalization and strong reinsurance programme
- Well diversified investment portfolio with satisfactory asset quality
Constraining Factors
- High reliance on brokers poses a threat to earnings stability
- Prevailing economic conditions constrain profitability and growth
Rating Sensitivity Factors
Factors that could, individually or collectively, lead to an improvement in the ratings and/ or outlook include:
- An improvement in market share of general insurance products in its largest market, T&T to 10% or more
- An improvement in the overall credit profile for Beacon’s fixed income portfolio where more than 60% of the portfolio is rated investment grade on the S&P rating scale
- Enhancement of Beacon’s risk management through the complete rollout of an enterprise risk management system
- Increased profitability leading to an improvement in ROA and ROE to above 2.5% and 10% respectively for 2 consecutive financial periods
Factors that could, individually or collectively, lead to a lowering of the ratings and/ or outlook include:
- A 2-notch deterioration of the credit rating of Beacon’s top reinsurer.
- A deterioration of the company’s capital adequacy ratio to 150% or lower on a sustained basis for at least 6 months under normal conditions
COMPANY BACKGROUND
The Beacon Insurance Company Limited (‘Beacon’ or ‘the Company’) was originally established in 1972 as the Caribbean Insurance Company Limited, before being rebranded in 1996. On May 7, 2018, Beacon agreed to the sale of 40% of its shareholding to Colonial Group International Limited (CGI) now known as Coralisle Group Limited, a Bermuda-based insurance company with commercial operations in Bermuda, the Cayman Islands, The Bahamas, the British Virgin Islands, Turks & Caicos Islands and Barbados. The transaction was approved by the Central Bank of Trinidad and Tobago on May 3, 2019 and led to a capital injection from all shareholders totalling TT $26.3 million in July 2019.
Beacon is now owned by CGH Limited (46%), CGI (40%), and an individual shareholder (14%). The Company is domiciled in Trinidad and Tobago (T&T) and has a regional presence through its Barbados, Grenada and Saint Lucia offices, and agency operations located in Dominica, Saint Kitts and Nevis, and Saint Vincent and the Grenadines. The Company specializes in general insurance, underwriting for both individual and institutional clients, and offers a broad product range comprised of Property, Motor, Accident and Casualty, Marine Cargo and Hull, Bonds, and Engineering insurance. The Company also provides Group Health and Group Life insurance targeted to institutional clients. The offering of all these products is made possible by Beacon’s composite insurance license which allows the Company to offer any type of insurance without obtaining additional licenses.
Analytical Contacts:
Nikkel Collymore
Tel: 1-868-627-8879 Ext. 240
E-mail: [email protected]
Keith Hamlet
Tel: 1-868-627-8879 Ext. 229
E-mail: [email protected]
Website: www.caricris.com
Email: [email protected]
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