AM Best assigns credit ratings to Hand-in-Hand Mutual Fire Insurance Company Limited and Hand-in-Hand Mutual Life Assurance Company Limited | Business Insurance

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MEXICO CITY–(COMMERCIAL WIRE)–I am better has assigned a Financial Strength Rating of B++ (Good) and Long-Term Issuer Credit Ratings of “bbb+” (Good) to The Hand-in-Hand Mutual Fire Insurance Company Limited (HIHF) (Guyana) and Hand-in-Hand Mutual Fire Insurance Company Limited (HIHF) (Guyana). Hand Mutual Limited life insurance company (HIHL). Both entities are known as the Hand-in-Hand Group. The outlook assigned to these Credit Ratings is stable.

HIHF’s ratings reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile, and adequate enterprise risk management (ERM). HIHL’s ratings reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

HIHF is the oldest insurance company in Guyana, established in 1865, and is the second largest insurance company in the country’s insurance industry. The company writes property and casualty lines with a market share of approximately 19.8%. As of December 2021, its business portfolio was mainly composed of fire and auto coverage, although it also operates heavily in the accident and civil liability market.

HIHL was incorporated in 1966 and, as a mutual company, is owned by policyholders with a small number of preferred shares issued to HIHF. The company is predominantly engaged in underwriting group health and life insurance, with a significant portfolio of ordinary life insurance and annuities. Its market share is estimated at 22.5%. Overall, the Guyanese insurance market saw 16.9% growth in 2021 and totaled USD 63 million.

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The very strong companies’ balance sheet strength assessment reflects each of their stable capital bases, with responsible asset and liability management and adequate reinsurance coverage. Investment risk is an important component of the required capital, due to the limited securities available in the market in which both companies operate. As mutual societies, the quality of the capital is very good due to its stability; the main outflows come from three-year profit sharing with authorized policyholders.

Operating performance at both companies is considered adequate with manageable profit and loss ratios; however, companies have seen some volatility in premium growth and have reported bottom line results, although results in the most recent five-year period have been positive. Companies share policies and procedures and perform stress tests as part of their ERM, and are continually strengthening risk management capabilities.

The stable outlook for HIHF and HIHL reflects the expectation that the companies will maintain their very strong balance sheet assessment, supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). .

Positive rating action on HIHF and HIHL could follow if the companies continue their positive trend in risk-adjusted capitalization while consistently building their capital bases. Conversely, a negative rating action for HIHF and HIHL could occur if there is a significant decline in the companies’ capital bases or if operating performance deteriorates over time due to sustained underwriting or net losses.

This news release relates to credit ratings that have been posted on AM Best’s website. For full rating information related to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity Web page. For additional information on the use and limitations of credit scoring opinions, please see Best Credit Score Guide. For information on the proper use of Best’s Credit Ratings, Best’s Performance Reviews, Best’s Preliminary Credit Reviews, and AM Best’s press releases, see Guide to the proper use of Best ratings and evaluations.

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AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.

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