Market Overview

A.M. Best Downgrades Issuer Credit Rating of NCB insurance Company Limited


A.M. Best has downgraded the Long-Term Issuer Credit Rating
(Long-Term ICR) to "bb" from "bb+" and affirmed the Financial Strength
Rating (FSR) of B (Fair) of NCB Insurance Company Limited (NCBIC)
(Jamaica). The outlook of these Credit Ratings (ratings) is stable.
NCBIC's direct banking parent is National Commercial Bank Jamaica
Limited, which is traded on the Jamaica and Trinidad and Tobago stock

The ratings reflect NCBIC's balance sheet strength, which A.M. Best
categorizes as adequate, as well as its strong operating performance,
neutral business profile and appropriate enterprise risk management

This rating action reflects the company's growing concentration in
single economy investment risk relative to capital levels compared with
previous years. A.M. Best's overall assessment of the company's balance
sheet strength reflects this increasing asset risk profile despite
regulatory capital levels that are well above regulatory minimums. A
majority of the company's invested asset portfolio is comprised of
Government of Jamaica bonds. Jamaica is categorized by A.M. Best as a
country risk tier four (CRT-4), a ranking that denotes a stressed
economic environment with high levels of economic and financial system
risk and moderate levels of political risk that are placing a strain on
wages and employment. This in turn has the potential to constrain
NCBIC's potential future growth and lower risk-based capital as measured
by A.M. Best's stochastic risk-based capital model. Given the
concentration of invested assets held in Jamaican-related risks, growth
in the company's asset base will likely maintain these levels of risk
adjusted asset exposures in the short to medium term.

While these challenges are clearly present, A.M. Best notes that NCBIC
has been able to demonstrate a history of strong and stable financial
performance to date. The company's operating performance includes rising
insurance premium revenues, strong investment spreads and increasing fee
income resulting in good returns on equity.

NCBIC provides the Jamaica market with its core group life and creditor
life products, sold through its banking parent. The company's good
market position in Jamaica and diverse, yet lower risk product profile
are offset by significant concentration of its operations in Jamaica.
The company's ERM is considered as developed and appropriate for the
company's risk profile. The stable outlooks reflect A.M. Best's
expectation that the company will continue to operate with a similar
business and operating profile.

This press release relates to Credit Ratings that have been published
on A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
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Action Press Releases

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