AM Best Places Best Meridian Insurance Company and Best International Meridian SPC Insurance Company credit ratings are under review with negative implications
OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best has placed under review with negative implications the financial strength rating of A- (Excellent) and the long-term credit ratings of issuers of “a-” (Excellent) from Best Meridian Insurance Company (BMIC) (Miami, FL) and Best Meridian International Insurance Company (BMIIC) (Grand Cayman, Cayman Islands).
This credit rating measure (rating) follows BMIC’s first quarter 2021 and late 2020 results, which signaled a deterioration in its directly issued mortgage holdings. While the organization has a successful history of profitable returns on its mortgage portfolio, properties are concentrated in Florida, which experienced a significant economic downturn in 2020 due to the COVID-19 outbreak. Additionally, while BMIIC has contracted measures in place to reduce the risk of counterparty litigation and non-performance, AM Best remains concerned about the increase in reinsurance receivables, including much higher counterparty balances. unrated to BMIIC associated with its relatively new property and casualty reinsurance business. . Based on these aspects, there is a potential for the consolidated capital adequacy ratio score of Best to deteriorate at the end of 2020 to a level that no longer supports the current assessment of balance sheet strength. The ratings will remain under review pending the filing by BMIIC of its audited GAAP financial statements for the end of 2020, AM Best’s further discussions with management regarding these financial results and until 2021 as well. than the expected growth of the Company’s property and casualty reinsurance business.
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