COLINA Insurance Limited responded swiftly yesterday to a downgrading of its rating outlook by insurance rating agency, A.M. Best, from “stable” to “negative”, a move the agency linked to concerns about Colina’s real estate investments.
A.M. Best affirmed Colina Insurance Limited’s financial strength rating of “A- (Excellent) and issuer credit rating of “a-” but stated that its revised rating outlook “reflects A.M. Best’s concerns regarding the risks associated with Colina’s high concentration in real-estate investments relative to the total equity of the company and the continued delinquencies in its mortgage loan portfolio that are attributable to the current weak economic environment in the Bahamas.”
The agency, which assesses insurance companies ability to pay claims, noted that Colina’s overall mortgage delinquency exposure “relative to its consolidated stockholders’ equity remains high, although somewhat improved in 2010 from prior years.”
