OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of Colina Insurance Limited (Colina). Concurrently AM Best has affirmed the Long-Term ICR of “bbb-” (Good) of Colina Holdings Bahamas Limited (CHBL). Both companies are domiciled in Nassau, Bahamas. The outlook of these Credit Ratings (ratings) is negative.

The ratings reflect Colina’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The balance sheet strength assessment reflects a very strong level of risk-adjusted capital, low financial leverage levels and good liquidity, which is partly offset by the company’s limited investment options and high concentration of sovereign debt holdings. The company’s mortgage loan portfolio has been declining as a portion of its total investment portfolio, but does contain an elevated proportion of delinquent loans. Operating performance remains strong with minimal impact to operating earnings resulting from Hurricane Dorian and COVID-19 in recent years. Significant uncertainty on future investment performance remains due to COVID-19.

Colina’s business profile assessment considers its position as a market leader in the Bahamas and creditworthy product offerings but these are offset by its geographic concentration in the Bahamas. The company’s ERM framework and governance structure are appropriate for its risk profile. The negative outlooks reflect AM Best’s concern regarding global economic conditions and their negative impact on territories in the Caribbean. Regional territories in the Caribbean are impacted materially by tourism and energy factors, which are being affected in the short term by global conditions. The negative outlooks also reflect AM Best’s concern that these conditions could result in volatility in the operating performance and deterioration in the company’s risk based capitalization of these insurers in the short to intermediate term. AM Best will continue to monitor the economic conditions in the Bahamas and take appropriate rating actions as they change.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating 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 regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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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 does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.