A.M. Best Downgrades Ratings of Gulf Insurance Limited; Places Under Review With Negative Implications

OLDWICK, N.J.--(Business Wire)--
A.M. Best Co. has downgraded the financial strength rating to B++ (Good) from A-
(Excellent) and issuer credit rating to "bbb" from "a-" of Gulf Insurance
Limited (Gulf) (Trinidad). Both ratings have been placed under review with
negative implications.

These rating actions reflect Gulf`s historically profitable operating
performance, adequate capitalization and strategic geographic spread of risk.
Gulf is a multi-line property/casualty insurer operating in several Caribbean
markets with its main operating presence in Trinidad and Tobago, St. Maarten and
the British Virgin Islands. The company has historically reported consistent
operating profits as a result of disciplined underwriting and conservative risk
management and pricing strategies. These strengths have enabled Gulf to continue
to enhance its capitalization, which remains adequate for its current business
profile when measured by Best`s Capital Adequacy Ratio.

Partially offsetting these strengths are Gulf`s limited financial flexibility
and the level of financial leverage at its parent, Gillani Limited, the
increasingly competitive regional markets in which it operates and the company`s
significant reliance on reinsurance.

The ratings have been placed under review as a result of the level of financial
leverage and intangible assets at Gillani Limited. As the only subsidiary of its
parent, Gulf has a continuing burden to service Gillani Limited`s debt
obligations, and this could potentially have a negative impact on Gulf`s
operations. The ratings will remain under review pending further discussions
with management relative to capital management strategies at Gillani Limited. At
that time, A.M. Best will re-evaluate Gulf`s capital position and overall
financial condition, and depending on the outcome of these discussions, the
potential exists for further negative rating actions.

For Best`s Credit Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any
additional methodologies and factors that may have been considered, can be found
at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating
organization dedicated to serving the financial and health care service
industries, including insurance companies, banks, hospitals and health care
system providers. For more information, visit www.ambest.com.

A.M. Best Co.
Analysts:
Ricardo Longchallon, 908-439-2200, ext. 5676
ricardo.longchallon@ambest.com
or
Henry Witmer, 908-439-2200, ext. 5097
henry.witmer@ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com

Copyright Business Wire 2009