A.M. Best Company

11/24/2020 | Press release | Distributed by Public on 11/24/2020 11:46

AM Best Affirms Credit Ratings of RF&G Insurance Company Limited

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NOVEMBER 24, 2020 12:34 PM (EST)

AM Best Affirms Credit Ratings of RF&G Insurance Company Limited


Elí Sánchez
Associate Director
+52 55 1102 2720, ext. 122
[email protected]

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
[email protected]

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
[email protected]

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
[email protected]


MEXICO CITY - NOVEMBER 24, 2020 12:34 PM (EST)
AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of 'bbb' of RF&G Insurance Company Limited (RF&G) (Belize). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect RF&G's balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

RF&G is the leading property/casualty insurer in Belize, with over a 50% market share of this segment. The company is wholly owned by its holding company, G.A. Roe & Sons Limited (ROE), which operates as a finance, management and investment company. RF&G was established in Belize in 1964, when the insurance operation was called Horncastle (British Honduras) Ltd. In 2005, ROE acquired Regent Insurance and merged the operations, resulting in a 2008 name change to RF&G Insurance. RF&G's business portfolio as of year-end 2019 was composed of fire (53%), motor (22%), casualty (15%) and the remaining a mix of marine, aviation, bonds and title.

AM Best considers RF&G's balance sheet to be very strong; risk-adjusted capitalization reflects the company's conservative risk appetite supported by an adequately set reinsurance program. Nevertheless, the volume of its capital, gross exposure to catastrophe risk and reinsurance dependence limits AM Best's view of the company's balance sheet strength. Additionally, AM Best considers RF&G's ERM practices as appropriate given its comprehensive and appropriate risk framework, and the low complexity of its operations.

AM Best considers the company's operating performance as of December 2019 to be adequate, with improving loss ratios due to successful adjustments in underwriting and low impact catastrophe events in comparison with previous years. The company also experienced better performance as of September 2020, as claims frequency and costs were limited by COVID-19 pandemic travel restrictions and the corporate book of business drove growth. The impact of hurricanes has been limited and AM Best will continue to monitor the company's results in this regard.

RF&G has been able to navigate the current crisis successfully due to its underwriting discipline, experienced management team and competitive position in the market; however, macroeconomic factors in Belize continue to be a key concern there, including access to USD in the financial system and the credit quality of eligible investments to cover insurance obligations. Despite that, the company's business profile is considered neutral as management has proactively worked with financial authorities, regulators and business partners, including reinsurers to face any potential adversities resulting from the current economic conditions.

Positive rating actions are not expected in the medium term due to Belize's challenging economic environment. Negative rating actions could take place if the company presents lower risk-adjusted capitalization driven by volatility in its net results or from capital outflows.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of AM Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Universal BCAR (Version June 11, 2020)

  • Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017)

  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

  • Scoring and Assessing Innovation (Version March 5, 2020)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Guide to Best's Credit Ratings.

  • Previous Rating Date: November 27, 2019

  • Date Range of Financial Data Used: December 31, 2014-September 31, 2020

This press release relates to rating(s) that have been published on AM Best's website. For additional 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.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company's financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best's credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best's credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best's rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.

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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.