HONG KONG (BUSINESS WIRE)\u2014A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of \u201cbbb+\u201d of Century Insurance Company (Guam) Limited. The outlook of CIC Guam\u2019s ratings is stable.<\/p>\n
The ratings of CIC Guam reflect its solid risk-based capitalization, continuous favorable operating results and improved claim management revision. The ratings also acknowledge the support the company receives from THC, its parent company. <\/p>\n
CIC Guam\u2019s risk-adjusted capitalization, as measured by Best\u2019s Capital Adequacy Ratio, is supportive of its current ratings. CIC Guam\u2019s capitalization level has consistently improved as a result of CIC Guam\u2019s favorable underwriting and investment performance in recent years. The company\u2019s consistent positive retained earnings are a reflection of its emphasis on prudent underwriting and efforts to improve its claims management, along with its diversified investment strategy. <\/p>\n
Partially offsetting these positive rating factors are the competitive landscape in Guam, CIC Guam\u2019s relatively high expense ratio and its volatile loss reserve development history. <\/p>\n
Guam\u2019s general insurance industry continues to be very competitive. CIC Guam\u2019s premium declined in 2013 due to stricter underwriting and price competition, which caused a number of non-renewals. In addition, the company in July 2013 stopped writing marine insurance, construction bonds and other high risk policies, which further contributed to the company\u2019s premium decline. <\/p>\n
Future positive rating actions could occur if CIC Guam shows continuous improvement in its operating results and expense management while regaining its market share and enhancing loss-reserve adequacy. <\/p>\n
Meanwhile, A.M. Best downgraded the FSR to B (Fair) from B+ (Good) and ICR to \u201cbb+\u201d from \u201cbbb-\u201d of Century Insurance Company, Ltd. (CIC Saipan). The outlook for the ICR has been revised to negative from stable, while the FSR remains stable. Concurrently, A.M. Best has withdrawn the ratings due to management\u2019s request to no longer participate in A.M. Best\u2019s interactive process. A.M. has also <\/p>\n
The rating actions reflect CIC Saipan\u2019s unfavorable underwriting performance since 2012 that resulted in operating losses and overall declines in its risk-adjusted capitalization. In 2013, the company\u2019s net loss was primarily due to major losses incurred in the motor, general liability and workers\u2019 compensation lines. Although CIC Saipan has implemented multiple measures to restore its profitability, the ongoing challenges are expected to weigh on the underwriting results in the near term, given the economic decline in the territory. <\/p>\n
The ratings take into consideration CIC Saipan\u2019s supportive risk-adjusted capitalization, its leading position in the non-life insurance market in CNMI and improved claim management revision. The ratings also acknowledge the support the company receives from its parent, Tan Holdings Corp. <\/p>\n
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication. <\/p>\n","protected":false},"excerpt":{"rendered":"
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