A.M. Best Affirms Credit Ratings of Colina Insurance Limited and Colina Holdings Bahamas Limited

A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Colina Insurance Limited (Colina). Concurrently, A.M. Best has affirmed the Long-Term ICR of “bbb-” of Colina Holdings Bahamas Limited (CHBL) [BISX: CHL]. Both companies are domiciled in Nassau, Bahamas. Colina is a wholly owned subsidiary of its publicly traded parent, CHBL, which in turn is majority owned by AF Holdings Ltd. (AFH). The outlook of these Credit Ratings (ratings) is stable.

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

Colina’s balance sheet strength assessment is supported by its strongest level risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as its favorable liquidity position. Partially offsetting the strongest risk-adjusted capital level is limited investment diversification. Exchange-control restrictions in the Bahamas have limited the company’s ability to significantly diversify its investment portfolio, resulting the company holding a high proportion of sovereign securities. The company’s operating performance is considered to be strong based on its long-standing trend of profitability combined with a lack of volatility, which drives the company’s capital growth. A.M. Best expects a continuation of a normalized level of profitability based on recent performance measures, including favorable return metrics. However, given the mature nature of the market, Colina’s top line growth has been relatively flat in recent years.

While Colina continues to generate positive earnings and enjoys a leading market share in the Bahamas, it operates almost exclusively in the Bahamas, limiting its ability to achieve meaningful growth. Growth is further impacted by the health of the Bahamas economy, which relies heavily on tourism and can be impacted by individual weather events such as hurricanes. A.M. Best considers Colina’s enterprise risk management program to be appropriate for the company’s risk profile. The company has a good risk management oversight and structure, as well as a developed framework with clear risk appetite and tolerance levels in place.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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