AM Best affirmed the excellent ratings for one of Bermuda’s leading domestic insurance groups, the privately held Coralisle Group Ltd.

The affirmation came as Best upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the long-term issuer credit rating to “a” (Excellent) from “a-” (Excellent) of subsidiary CG United Insurance Ltd of Barbados.

The outlook of these credit ratings has been revised to stable from positive.

Concurrently, the ratings agency has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) for the life/health and property/casualty operating subsidiaries of Bermudian-based Coralisle Group Ltd.

The outlook of these ratings is stable.

CG is a wholly owned intermediate holding company of Edmund Gibbons Ltd, the ultimate parent company.

All companies are domiciled in Bermuda, unless otherwise specified.

The ratings reflect CG’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

On a consolidated basis, the agency said, CG continues to demonstrate the strongest level of risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio, supported by ample liquidity and fungibility of resources across the organisation.

AM Best said: “Financial leverage was moderate in 2022, after the acquisition of CG United in May of 2022, which was partially financed with debt. This debt was fully repaid in 2023.

“Reinsurance capacity was severely constrained going into 2023, which drove an increase in retentions on proportional treaties.

“To secure appropriate excess of loss limits given the additional retentions, higher excess of loss deductibles were accepted.

“These, combined with much higher property exposure after the CG United acquisition, materially increased reinsurance dependence.

“However, AM Best believes the programme remains supportive of the overall balance sheet assessment.”

The agency added: “CG’s year-end 2022 results were materially impacted by adverse investment results that more than offset otherwise favourable operating results.

“Despite the adverse net results in 2022, CG has reported consistent favourable operating and net results over the last five years driven by health and property casualty lines.

“Reported premium growth has been strong over the last five years, and especially strong in 2022, as CG closed on its acquisition of CG United in May and included associated premiums for seven months.

“Growth in 2023 is expected to be strong with full-year CG United results as large rate increases are realised throughout the property portfolio. Potential for volatility in earnings remains high due to catastrophe exposure and the risk of significant health reform in Bermuda.”

AM Best said the ratings of CG United reflect its increased strategic importance to CG and its substantially complete integration with the legacy business.

“This integration includes the rebranding of CG United in 2022, combined with reinsurance purchasing, the licensing of CG United entities to sell CG health products and cost synergies related to consolidation of core systems and processes.”

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed with stable outlooks, for the following subsidiaries of Coralisle Group Ltd: Coralisle Insurance (BVI) Ltd (British Virgin Islands), British Caymanian Insurance Company Ltd (Cayman Islands), Coralisle Insurance Company Ltd, Coralisle Life Assurance Company Ltd, Coralisle Medical Insurance Company Ltd, CG Atlantic Medical & Life Insurance Ltd (Bahamas), and CG Atlantic General Insurance Ltd (Bahamas).