The A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Bahamas First General Insurance Company Limited (BFG). The rating has been removed from under review and assigned a stable outlook.
A release from the insurance rating and information source says this reflects BFG’s solid capitalisation, historically profitable operating results, conservative risk management strategies and its leading market presence in The Bahamas. In addition, the rating reflects anticipated capital strengthening following losses incurred from third quarter 2004 hurricane activity. These positive factors derive from BFG’s sound use of reinsurance coupled with its long-term profitability and a solid capital foundation.
In 2004, BFG enhanced its business position in the local market with the acquisition of the Colina Financial Group’s general insurance business portfolio.
BFG expects to further increase its capital by USD5 million prior to year-end 2004, subject to regulatory approval, through the issuance of preferred shares to support growth initiatives and to enhance its capital position. In addition, the company continues to benefit from the sustainable competitive advantages derived from the ownership of key island agents and strategic agency relationships that have allowed it to establish name recognition and market share.
Notwithstanding exposure to loss accumulation from hurricanes, BFG’s strong reinsurance program has proven effective in protecting the company’s surplus position, reducing its net incurred losses to a manageable level.