19 February 2024

CG United's rating upgraded to 'A'

Ratings agency AM Best has upgraded the financial strength rating of CG United Insurance, the newly acquired subsidiary of Bermuda-based Coralisle Group. Coralisle's other subsidiaries have had their ratings affirmed by the ratings agency. 

AM Best upgraded Barbados-based CG United's rating to A from A- and revised the outlook to stable from positive. 

AM Best also affirmed the FSR of A for the life/health and property/casualty operating subsidiaries of Coralisle Group Ltd. 

Coralisle bought Massy United insurance in 2022 and rebranded it as CG United. IT operates in more than 20 territories in the Caribbean. 

AM Best said the ratings reflected CG’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

"On a consolidated basis, CG continues to demonstrate the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), supported by ample liquidity and fungibility of resources across the organization," AM Best said. "Financial leverage was moderate in 2022, after the acquisition of CG United in May of 2022, which was partially financed with debt. This debt was fully repaid in 2023. 

"Reinsurance capacity was severely constrained going into 2023, which drove an increase in retentions on proportional treaties. To secure appropriate excess of loss limits given the additional retentions, higher excess of loss deductibles were accepted. These, combined with much higher property exposure after the CG United acquisition, materially increased reinsurance dependence. However, AM Best believes the program remains supportive of the overall balance sheet assessment.

AM Best added: "CG’s year-end 2022 results were materially impacted by adverse investment results that more than offset otherwise favourable operating results. Despite the adverse net results in 2022, CG has reported consistent favourable operating and net results over the last five years driven by health and P/C lines. 

"Reported premium growth has been strong over the last five years, and especially strong in 2022, as CG closed on its acquisition of CG United in May and included associated premiums for seven months. Growth in 2023 is expected to be strong with full year CG United results as large rate increases are realised throughout the property portfolio. Potential for volatility in earnings remains high due to catastrophe exposure and the risk of significant health reform in Bermuda."

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed with stable outlooks, for the following subsidiaries of Coralisle Group Ltd.: Coralisle Insurance (BVI) Ltd. (British Virgin Islands), British Caymanian Insurance Company Limited (Cayman Islands), Coralisle Insurance Company Ltd., Coralisle Life Assurance Company Ltd.; Coralisle Medical Insurance Company Ltd.; CG Atlantic Medical & Life Insurance Ltd. (Bahamas); and CG Atlantic General Insurance Ltd. (Bahamas).

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