Market Overview

A.M. Best Affirms Credit Ratings of TDC Insurance Company Limited


A.M. Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of "a-" of TDC
Insurance Company Limited. (TDCIC) (St. Kitts and Nevis). The outlook of
these Credit Ratings (ratings) remains stable.

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

TDCIC's balance sheet strength assessment reflects the company's
strongest risk-adjusted capitalization, as measured by Best's Capital
Adequacy Ratio (BCAR), history of favorable overall operating
performance, and an effective reinsurance program that mitigates
exposure to catastrophic loss events.

TDCIC is a leading motor and property writer in the St. Kitts and Nevis
markets. The company has consistently produced favorable underwriting
results, which have been complemented by a stable level of investment
income. A profitable overall earnings trend and relatively modest
dividend requirements have contributed to surplus growth and a sustained
solid level of risk-adjusted capitalization. Additional rating
considerations include difficult local macroeconomic conditions and
highly competitive market conditions. The company also has significant
loss exposure in the region to catastrophic weather events; however,
based on management's view of this exposure, the risk is reduced
materially by a reinsurance program backed by quality reinsurers.
Prospectively, earnings remain subject to a mature, highly competitive
regional market and catastrophe losses, given its exposure. Although
TDCIC has a solid regional business presence, its business profile is
limited as it operates primarily in St. Kitts and Nevis, which are
vulnerable to price changes in key commodities and highly dependent upon
tourism. Economic conditions in these territories continue to improve

The stable rating outlooks reflect A.M. Best's expectation that the
company's rating fundamentals will remain unchanged in the intermediate
term, including balance sheet strength remaining in the strongest
category and overall operating performance commensurate with similarly
rated peers.

Negative rating action could occur should operating performance
deteriorate over time due to a decline in underwriting standards,
inadequate pricing, an upward trend in claims frequency or severity,
changes in the regulatory, legislative or economic condition in St.
Kitts and Nevis or if risk-adjusted capitalization were to significantly
weaken. This may occur from a material loss of surplus should
catastrophic events exceed the limits of the company's reinsurance

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
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases

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