A.M. Best Co. has placed under review with negative implications
the financial strength rating (FSR) of A- (Excellent) and issuer credit
ratings (ICR) of "a-" of Sagicor Life Inc., Sagicor
Capital Life Insurance Company Limited (both domiciled in St.
Michael, Barbados), Sagicor General Insurance Inc. (Sagicor
General) (Bridgetown, Barbados) and Sagicor Life Insurance Company
(Sagicor Life USA) (Austin, TX). Additionally, A.M. Best has downgraded
the FSR to B+ (Good) from B++ (Good) and ICR to "bbb-” from “bbb” of Sagicor
Life Jamaica Limited (SLJ) (Kingston, Jamaica) and placed the
ratings under review with negative implications.
Concurrently, A.M. Best has placed under review with negative
implications the ICR of "bbb-" and debt rating of "bbb" on $150 million,
7.5% senior unsecured notes due 2016 of the ultimate parent, Sagicor
Financial Corporation (SFC) (Barbados). SFC is publicly traded on
Barbados, Trinidad and London stock exchanges.
The under review status follows the announcement of a debt exchange
program by the Government of Jamaica, which A.M. Best notes is the
second such program in three years. Under the program, eligible
investors would receive new notes that have lower coupons and longer
maturities. Given SFC’s exposure to the business and financial risks of
Jamaica through its controlling interest in SLJ, the ratings of SFC and
its subsidiaries have been placed under review with negative
The downgrading of the ratings of SLJ reflects its sizeable exposure to
the Jamaican government securities, as well as the ongoing pressures of
the weak Jamaican economy. A.M. Best expects that the bond exchange will
have a negative impact on SLJ’s risk-adjusted capital and earnings
The ratings will remain under review pending further clarification of
the full impact of the exchange program on the results and
capitalization of the group.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Additional key criteria utilized
include: “Evaluating Country Risk”; “Rating Members of Insurance
Groups”; and “Understanding Universal BCAR.” Best’s Credit Rating
Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most
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