Financial services group Sagicor Financial Company Limited, including its Barbados-based subsidiaries, has received a series of credit rating upgrades from AM Best.
The global credit rating agency attributed the upgrade of Sagicor Financial, which is registered in Bermuda, to its “very strong” balance sheet, strong operating performance, neutral business profile and appropriate enterprise risk management.
Reacting to the higher credit ratings when they were announced last Thursday, the group’s president and chief executive officer Andre Mousseau said the improved ratings “will allow us to continue to expand our distribution reach and improve our cost of capital”.
AM Best said it “upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the long-term issuer credit ratings to “a” (Excellent) from “a-” (Excellent) of most of the subsidiaries of Sagicor Financial Company Ltd.”
“These subsidiaries – Sagicor Life Inc. and Sagicor General Insurance Inc., both domiciled in St. Michael, Barbados, Sagicor Life Insurance Company, Austin, Texas and ivari, Toronto, Canada – collectively are referred to as Sagicor Financial by
AM Best and represent the organisation’s Canadian, United States and a portion of the Caribbean operating companies,” the rating agency noted.
“In addition, AM Best has upgraded the long-term issuer credit rating 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 US$550 million, 5.3 per cent senior unsecured notes, due 2028, of Sagicor Financial Company Ltd, the ultimate parent.”
AM Best added: “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 is stable.”
Reacting to the series of credit rating upgrades, Mousseau said: “We are pleased with the continued recognition of our financial strength by way of improvements in our credit ratings, both at our parent company and at many of our operating subsidiaries.”
AM Best said it “views Sagicor Financial’s consolidated risk-adjusted capitalisation as “strongest, as measured by Best’s Capital Adequacy Ratio, 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,” it said in announcing the upgrades.
“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.”
AM Best added: “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.” (SC)
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