[March 19, 2013]

A.M. Best Withdraws Ratings of Jamaica International Insurance Company Limited

A.M. Best Co. has downgraded the financial strength rating to B+ (Good) from B++ (Good) and the issuer credit rating to "bbb-" from "bbb" of Jamaica International Insurance Company Limited (JIIC) (Jamaica). The ratings were removed from under review with negative implications and assigned a negative outlook. Subsequently, A.M. Best has withdrawn the ratings in response to company management's request to no longer participate in A.M. Best's interactive rating process.

The rating downgrades and negative outlook reflect A.M. Best's concerns regarding the recently announced National Debt Exchange "NDX", its effect on the Jamaican financial markets, JIIC and potentially, its parent company, GraceKennedy Limited (GKL). Although A.M. Best expects JIIC to remain at least marginally profitable in non-catastrophe years, there also is the expectation that JIIC's investment income will continue to be negativel impacted by the reduced coupon rates and extended maturities on Jamaican bonds, which is a function of the NDX and its predecessor, the Jamaican Debt Exchange "JDX." The likely decrease in investment income will require JIIC to continue implementing underwriting improvements originally introduced after the JDX to maintain its current level of profitability. Another key concern is JIIC's concentration risk in regards to both its investment holdings and underwriting diversification.

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. Key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding Universal BCAR"; "Catastrophe Analysis in A.M. Best Ratings"; "Evaluating Non-Insurance Ultimate Parents"; and "Evaluating Country Risk." Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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