AM Best Places Credit Ratings of Best Meridian Insurance Company and Best Meridian International Insurance Company SPC Under Review With Negative Implications

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OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has placed under review with negative implications the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” (Excellent) of Best Meridian Insurance Company (BMIC) (Miami, FL) and Best Meridian International Insurance Company (BMIIC) (Grand Cayman, Cayman Islands).

This Credit Rating (rating) action follows BMIC’s first-quarter 2021 and year-end 2020 results, which reported deterioration in its directly issued mortgage holdings. While the organization has a successful history of profitable returns on its mortgage portfolio, the properties are concentrated in Florida, which experienced significant economic downturn during 2020 due to the COVID-19 outbreak. In addition, while BMIIC has contractual measures in place to reduce the risk of disputes and nonperformance of counterparties, AM Best remains concerned over the increasing reinsurance recoverables, including much higher balances from unrated counterparties at BMIIC associated with its relatively new property and casualty reinsurance business. Based on these aspects, there is a potential for deterioration of the year-end 2020 consolidated Best’s Capital Adequacy Ratio score to a level no longer supportive of the current balance sheet strength assessment. The ratings will remain under review pending BMIIC’s filing of its GAAP audited financial statements for year-end 2020, AM Best’s further discussions with management regarding those financial results and through 2021 as well as the expected growth of the company’s property and casualty reinsurance business.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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