The Beacon Insurance Company Limited

CariCRIS reaffirms “good creditworthiness” ratings for The Beacon Insurance Company Limited

The Beacon Insurance Limited

CariCRIS reaffirms ‘good creditworthiness’ ratings for The Beacon Insurance Limited

The Beacon Insurance Limited

RATING ACTION:

On June 15, 2022, CariCRIS reaffirmed the assigned ratings of CariA- (Foreign and Local Currency Ratings) on the regional rating scale, and ttA- on the Trinidad and Tobago (T&T) national scale for The Beacon Insurance Company Limited. A stable outlook was assigned.

RATING SENSITIVITY FACTORS:

Factors that could, individually or collectively, lead to an improvement in the ratings and /or outlook include:

An improvement in market share of general insurance products in its largest markets, T&T to 10% or more.
An improvement in the overall credit profile for Beacon’s fixed income portfolio where more than 60% of the portfolio is rated investment grade on the S&P rating scale.
Enhancement of Beacon’s risk management through the complete rollout of an Enterprise Risk Management system.
Increased profitability leading to an improvement in ROA and ROE to above 2.5% and 10% respectively for the next financial year.

Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:

A 2-notch deterioration of the credit rating of Beacon’s top reinsurer.
A deterioration of the company’s capital adequacy ratio of 150% or lower on a sustained basis for at least 6 months.

RATING RATIONALE

Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the currently assigned Issuer/Corporate Credit Ratings of CariA- (Foreign and Local Currency Ratings) on the regional rating scale and ttA- on the Trinidad and Tobago (T&T) national scale to The Beacon Insurance Company Limited (‘Beacon’ or ‘the Company’). These ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean and within T&T is good. CariCRIS also recommends the reaffirmation of the Company’s financial strength rating of CariA- which indicates that the Company’s relative ability to meet its ongoing insurance obligations is good.

CariCRIS further recommends the maintenance of a stable outlook on the ratings. The outlook is based on our expectation that Beacon will maintain good profitability over the next 12-15 months driven by continued good revenue performance. In FY2021, the Company’s return on assets and return on equity improved slightly to 2.8% (2.7% previously) while return on equity decreased slightly to 10.8% (11.8% previously). Both ROA and ROE were above CariCRIS’ expectations of 2.5% and 10% respectively. Should the Company’s return metrics meet or surpass CariCRIS’ expectations in the next financial year, we may increase the Company’s earnings parameter. Additionally, Beacon is expected to place focus on the enhancement of its systems and procedures as the Company takes steps toward the improvement and implementation of a comprehensive Enterprise Risk Management (ERM) framework. Should this implementation be successful, the Company may experience an improvement in its systems and procedures risk rating paramet

Analysts’ Contact Info:

Keith Hamlet

Mobile : 1-868-487-4356

khamlet@caricris.com

Sultan Mohammed

Mobile : 1-1868-362-7304

smohammed@caricris.com

Disclaimer: CariCRIS has taken due care and caution in compilation of data for this product. Information has been obtained by CariCRIS from sources which it considers reliable. However, CariCRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published / reproduced in any form without CariCRIS’ prior written approval. CariCRIS is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this product.

Government of the Commonwealth of Dominica

RATING ACTION:

On June 15, 2022, CariCRIS reaffirmed the assigned ratings to a US $25 million debt issue of the Government of the Commonwealth of Dominica (GOCD) of CariBB (Foreign and Local Currency Rating) on the regional scale. The stable outlook was maintained.

RATING SENSITIVITY FACTORS:

Factors that could, individually or collectively, lead to an improvement in the ratings and /or outlook include:

Growth in economic activity of 5% or more above pre-Hurricane Maria levels, sustained for at least 3 years
A fiscal surplus of more than 5% recorded for 2 consecutive fiscal periods

Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:

Debt/GDP ratio exceeding 100% for another 2 years
Economic and social disruption caused by natural disasters
Material reduction in grants and multilateral funding

Analysts’ Contact Info:

Stefan Fortuné

Mobile : 1-868-799-6751

sfortune@caricris.com

Kyla Balwant

kbalwant@caricris.com

www.caricris.com

info@caricris.com

Government of the Commonwealth of Dominica

CariCRIS reaffirms its credit ratings for the Government of the Commonwealth of Dominica; Outlook Stable

RATING ACTION:

On June 15, 2022, CariCRIS assigned initial Corporate Credit ratings of gyA+ (Local Currency Rating) and gyA (Foreign Currency Rating) on the Guyana national scale to Premier Insurance Company Inc. (Premier or the Company). A stable outlook was assigned.

RATING SENSITIVITY FACTORS:

Factors that could, individually or collectively, lead to an improvement in the ratings and/ or Outlook include:

An improvement in our internal credit rating of the Government of Guyana
Sustained growth in PAT by >15% over the next 2 years without adversely impacting regulatory capital and asset quality
An increase in the concentration of good quality, liquid fixed income instruments leading to improved asset risk
Sustained growth in TNW by >15% over the next 2 years
An improvement in the credit rating of TRINRE, Premier’s parent company

Factors that could, individually or collectively, lead to a lowering of the ratings/or outlook include:

A lowering of our internal credit rating of the Government of Guyana
A 2-notch deterioration of the credit rating of any of Premier’s reinsurers by A.M. Best, Fitch Rating or Standard and Poor’s Ratings Services
Loss of relationship with any of the Company’s reinsurers
A deterioration in the Company’s Minimum Capital and Solvency requirements below the quantities stipulated by the BoG sustained for more than 6 months
A 10% fall in gross premium income for 2 consecutive years
A material deterioration in the Company’s investment asset quality sustained for a period of 6 months
A lowering of the credit rating of TRINRE, Premier’s parent company

Analysts’ Contact Info:

Keith Hamlet

Mobile: 1-868-487-8356

khamelt@caricris.com

Maxwell Gooding

mgooding@caricris.com

www.caricris.com

info@caricris.com

Premier Insurance Company Inc.

CariCRIS assigns “good creditworthiness” credit ratings for Premier Insurance Company Inc.

RATING DRIVERS

Supporting Factors:

Leading independent renewable power producer in Jamaica with business operations supported by long-term contracts
Good operating efficiency supported by well-maintained wind turbines
Solid track record of profitability and above-average return metrics
Healthy liquidity and strong debt servicing capability supported by strong cash flows from operations
Satisfactory corporate governance structure and robust risk management practices

Constraining Factors:

Revenue highly susceptible to the vagaries of nature and wind variability
Lack of government support and protective legislation for local renewable energy producers

Rating Sensitivity Factors

Factors that could, individually or collectively, lead to an improvement in the ratings and/or Outlook include:

Successful diversification by the Company into other renewable sources of energy or geographical markets, thereby boosting revenue stability and/or expansion
Improved operating efficiency, with capacity and availability metrics consistently meeting targets

Factors that could, individually or collectively, lead to a lowering of the ratings and/or Outlook include:

Breach of any of the debt covenants
Failure to satisfy any of the performance requirements of the Power Purchase Agreements

COMPANY BACKGROUND

Wigton Windfarm Limited (‘Wigton’ or the Company) is a wind energy facility that was established in April 2000 under the Jamaican Companies Act. The Company was established as a wholly owned subsidiary of the Petroleum Corporation of Jamaica (PCJ), a statutory entity created by the Petroleum Act that was initially mandated to explore and develop Jamaica’s petroleum resources. In 1995, PCJ’s mandate was expanded to include the development of indigenous renewable energy resources and be the main entity in the implementation of Jamaica’s 2009-2030 National Energy Policy. The Government of Jamaica (GoJ) divested Wigton via an initial public offering (IPO) on the Jamaica Stock Exchange (JSE) which was successfully completed in May 2019. Wigton’s shareholders are diversified among institutional and private shareholders. As at June 2021, Wigton’s top 3 shareholders were Mayberry Jamaican Equities Limited (10%), Victoria Mutual Building Society (9.6%) and the National Insurance Fund (6.4%). As at November 10, 2021, Wigton ‘s market capitalization stood at approximately J $5.5 billion^[1].

Analytical Contacts: