The US-based insurance rating organisation A.M. Best Co. removed the financial strength rating of Cayman General Insurance Company Limited last week at the latter’s request.
Prior to the action, Best announced in a press release dated 6 January that it had affirmed the financial strength rating of B- (Fair) it had assigned the week before.
That rating, which was a downgrade from the A- (Excellent) rating Cayman General had previously, was also assigned a negative outlook.
Cayman General had not provided A.M. Best with requested Hurricane Ivan insurance loss information or a recapitalization plan. As a result, Best indicated that it had based its downgrading rating action on insurance industry loss estimates in, and on Cayman General’s market share information.
‘In A.M. Best’s opinion, the company has limited access to the substantial level of additional capital necessary to return Cayman General to the secure rating range,’ it stated.
Cayman General president and CEO Danny Scott said the withdrawal of the company’s A.M. Best rating is for the best at this time. ‘It means that I no longer have to deal with them at their pace,’ he said.
Mr. Scott said the rating did not really matter to Cayman General anyway. ‘We don’t do business in the United States, so we don’t need the A.M. Best rating like some other insurance companies do.
‘What is more important is how CIMA (Cayman Islands Monetary Authority) and our auditors rate us, and they haven’t told us we can’t do business.’
Angered by Best’s downgrading on 30 December, Mr. Scott said afterwards ‘it was quite naughty of them’.
He explained that he had asked Best to withdraw Cayman General’s rating prior to them assigning the downgrade, but that the request had crossed with the timing of Best’s action.
Mr. Scott indicated that time was the reason he had not provided the information Best requested.
‘We just couldn’t comply at the pace that Best wanted us to,’ he said. ‘This now gives us the opportunity to work at our own pace.’
Mr. Scott said Cayman General would be able to supply AM Best with the requested information by 17 January, after which it would be prepared to have Best rate the company again.