The Tribune

COLINA Insurance has seen its financial strength and creditworthiness confirmed by the global insurance industry's main rating agency.

A. M. Best affirmed the life and health insurer's A- (Excellent) financial strength rating, and 'a-' long-term issuer credit rating, while also placing a 'stable' outlook on the company due to its capitalisation and operating ratios.

It added that Colina's ratings reflected its financial performance and "leading position in the life/health market in the Bahamas" as its largest player.

These factors, though, were somewhat offset by concerns over delinquencies in its mortgage portfolio and this nation's economic health.

"The rating affirmations for Colina reflect the company's leading position in the life/health market in the Bahamas, its strong risk-adjusted capitalisation and favourable operating results," A. M. Best said.

"Partially offsetting these strengths are delinquencies in the company's mortgage loan portfolio and a narrow geographic profile in the Bahamas.

"Colina enjoys a leading market share in the region in its selected segments, and its risk-adjusted capitalisation is appropriate relative to its investment and insurance risks. A.M. Best expects a continuation of a normalised level of profitability based on recent performance measures, including favourable return metrics.

"However, given the mature nature of the market, Colina's top line growth has been fairly flat in recent years."

The rating agency added: "Economic headwinds within the Bahamas' economy, and potential mortgage loan delinquencies, continue to pose rating concerns for the company in the near to intermediate term. "While A.M. Best remains concerned over mortgage loan exposures and delinquencies relative to total stockholders' equity, A.M. Best notes that over the past several years the company has decreased its exposure to such asset classes in the aggregate, and as a percentage of total invested assets."

According to A.M. Best's ratings methodology, the 'A-' rating is assigned only to insurance companies it believes have a strong ability to meet their ongoing obligations. Colina has maintained a rating history of A- (Excellent) since it received its first A. M. Best rating in 2004.

A.M. Best also affirmed the 'bbb-' long-term issuer credit rating for the company's BISX-listed parent, Colina Holdings Bahamas, together with a stable outlook.

In the financial year ended December 31, 2016, the company disclosed a $15.7 million year-over-year growth in its total asset base.

During the 2017 first half, Colina Holdings expanded its asset base by a further $16.7 million to $743.4 million, with total equity at $186.3 million at June 30.

"We are very pleased to have our A- (Excellent) rating affirmed once again," said Colina Holdings executive vice-chairman, Emanuel M. Alexiou. "We continue to maintain a conservative operating philosophy, focused on ensuring Colina maintains the long-term financial strength to honour the financial commitments we make to our policyowners every day.

"A. M. Best's affirmations demonstrate that they have a great deal of confidence in Colina and its financial stability, strategy and prospects for continued growth."