A.M. Best Assigns Initial Rating for Jamaica International Insurance Co.

February 13, 2004

A.M. Best Co. has assigned an initial financial strength rating of B++ (Very Good) to Jamaica International Insurance Company Ltd. (JIIC) (Kingston, Jamaica). The rating outlook is stable.

The rating is based on JIIC’s strong capitalization, excellent operating results, liquid investment portfolio and support from its parent company, Grace, Kennedy & Company Limited, a prominent business conglomerate in the region. Offsetting these factors is the current challenging macroeconomic environment in Jamaica and the high expense structure of the company due to elevated reinsurance costs.

The company has been able to generate capital internally in the last five years due to strong operating results driven by income from its investment portfolio. As a member of the Grace, Kennedy & Company Limited conglomerate, JIIC benefits from the brand recognition and support of its parent.

However, JIIC will be challenged by the recent deterioration in the Jamaican economy and the geographic concentration of risk on the island. Given the country’s weather-related catastrophic exposure, JIIC depends on reinsurance for earnings and surplus protection. JIIC has in place a comprehensive catastrophe reinsurance program that minimizes its net retention of losses from catastrophic events.

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