Bahamian insurers under rating review

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A rating agency’s decision to place two Bahamian insurance companies under review due to a $90.5m acquisition by its parent group was yesterday said to be routine and of no concern.

A. M. Best, the insurance credit rating agency, said the ratings of Atlantic Medical Insurance (Bahamas) and Security and General Insurance Company - as well as all of Coralisle Group’s other subsidiaries - were under assessment due to the parent’s purchase of Barbados-based Massy United Insurance Ltd.

However, a well-placed source, speaking on condition of anonymity, described A. M. Best’s action as much ado about nothing. “That’s perfectly standard,” they explained. “Whenever there is a merger or acquisition, they place you under review so they can get an idea of whether it strengthens or impacts the rating.

“They’re rated ‘A’, which is the highest. Massy is ‘a-’. There is nothing unusual about this at all. They’ll come back and say because there’s no territorial overlap we maintain the respective ratings, and will make a determination as to what Coralisle’s rating may look like.”

A. M. Best, in its statement, said: “A. M. Best has placed under review with developing implications the financial strength rating of ‘A’ (excellent) and the long-term issuer credit ratings of ‘a ‘(Excellent) of Coralisle Group’s subsidiaries.

“This rating action follows the Coralisle Group’s announcement on September 7, 2021, that it has agreed to acquire a 100 percent stake in Barbados-based Massy United Insurance for $90.5m. A portion of the amount is expected to be financed and the remainder funded with cash reserves. The transaction is expected to close in early 2022 following the relevant regulatory approvals.

“By acquiring Massy United, Coralisle Group accomplishes its strategic diversification goals by expanding its geographic reach and broadening its product mix. The acquisition also gives the Coralisle Group access to Massy United’s network of agents and brokers, as well as access to commercial market clients to potentially cross-sell complementary services.”