A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” of Investors Trust Assurance SPC (ITA) (Cayman Islands).
The revised outlooks reflect the positive progress that ITA has made in growing premiums, expanding distribution and strengthening capital, as well as the improvement in the credit quality of the fixed-income portfolio in the general account over the last few years. The company has generated improved profitability trends, which has resulted in additional organic growth in the company’s invested asset base.
The Credit Rating (rating) affirmations continue to reflect ITA’s continued improving risk-adjusted capitalization trend, growth in net income and expanding geographical footprint. ITA commenced operations back in 2002 and has grown successfully in its niche market offering a core product portfolio comprised of unit-linked insurance policies distributed through a network of independent financial advisors in markets such as the Middle-East, Latin America, Africa, Asia-Pacific and Europe. The company does have a high surrender charge relative to costs of policy set-up, which supports its operating profile in the near-term. Fee income related to surrenders and withdrawals on a specific block of business potentially can reduce the rate of growth in profitability in the intermediate-term as the book of business runs off and fee income declines.
Partially offsetting these rating factors is ITA’s high liquidity risk profile within the fixed income investment portfolio when viewed in a stressed economic scenario. This risk is comprised of asset allocation to collateralized debt obligations and commercial mortgage-back securities. ITA faces challenges posed by uncertainty in some revenue streams from higher risk countries. ITA does compete with several large international insurance companies that offer life insurance, as well as similar asset management products, which A.M. Best believes could serve as a challenge to expansion efforts.
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