Investors Trust Assurance has seen its credit ratings significantly upgraded across a raft of key measurements, with the ratings agency AM Best assessing the Cayman-based company’s financial strength rating and its overall operating performance.
AM Best upgraded the company’s financial strength rating to A- (Excellent) from B++ (Good) and the long-term issuer credit rating to A- from BBB+. The outlook of these ratings was also revised to stable from positive.
The ratings reflect ITA’s balance sheet strength, which A.M. Best categorizes as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The upgrades reflect the improvement and integration of ERM in Investors Trust’s business operations and throughout the organization. The ratings also reflect Investors Trust’s continued improving risk-adjusted capitalization trend, growth in net income and expanding geographical footprint. AM Best views Investors Trust’s quality of capital favorably, as there is no debt or surplus notes as part of the company’s capital structure. The policyholder assets are held in segregated accounts with low insurance mortality liability.
Ariel Amigo, chief marketing and distribution officer at Investors Trust, told International Investment: “We have worked very hard over the years to achieve this upgraded rating from AM Best. We are thrilled with the outcome and look forward to future developments that will further strengthen our position in the industry.”
Partially offsetting these rating factors includes a high liquidity risk profile within the fixed income investment portfolio when viewed in a stressed economic scenario. This risk is primarily concentrated in asset allocations specific to less liquid structured products and commercial mortgage-backed securities.
The company’s operating performance continues to be profitable with a strong return on equity, increased fees from a growing policyholder base, a more diverse geographical footprint and high surrender charges relative to policy set-up costs. These strengths are partially offset by regulatory strain resulting from Investors Trust’s international footprint and revenue streams from countries of higher risk.
Investors Trust 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 advisers in markets such as the Middle East, Latin America, Africa, Asia-Pacific and Europe.
Investors Trust competes with several large international insurance companies that offer life insurance and similar asset management products. Investors Trust says it “sets its self apart by offering a highly sophisticated, interactive online platform for portfolio management.”