A.M. Best Upgrades Credit Ratings of Investors Trust Assurance SPC
A.M. Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” from “bbb+” of Investors Trust Assurance SPC (ITA) (Cayman Islands). The outlook of these Credit Ratings (ratings) have been revised to stable from positive.
The ratings reflect ITA’s balance sheet strength, which A.M. Best categorizes as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The upgrades reflect the improvement and integration of ERM in ITA’s business operations and throughout the organization. The ratings also reflect ITA’s continued improving risk-adjusted capitalization trend, growth in net income and expanding geographical footprint. A.M. Best views ITA’s quality of capital favorably, as there is no debt or surplus notes as part of the company’s capital structure. The policyholder assets are held in segregated accounts with low insurance mortality liability. Partially offsetting these rating factors includes a high liquidity risk profile within the fixed income investment portfolio when viewed in a stressed economic scenario. This risk is primarily concentrated in asset allocations specific to less liquid structured products and commercial mortgage-backed securities.
The company’s operating performance continues to be profitable with a strong return on equity, increased fees from a growing policyholder base, a more diverse geographical footprint and high surrender charges relative to policy set-up costs. These strengths are partially offset by regulatory strain resulting from ITA’s international footprint and revenue streams from countries of higher risk.
ITA has grown successfully in its niche market, offering a core product portfolio comprised of unit-linked insurance policies distributed through a network of independent financial advisers in markets such as the Middle East, Latin America, Africa, Asia-Pacific and Europe. ITA competes with several large international insurance companies that offer life insurance and similar asset management products. A.M. Best believes this could serve as a challenge to expansion efforts.
Source: A.M. Best