CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - JULY 10, 2014 03:15 PM (EDT)
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Aseguradora Ancón, S.A. (Ancón) (Panama). The outlook for both ratings is stable.
The ratings reflect Ancón's adequate capitalization and liquid position, favorable operating performance, strong reinsurance protection and explicit parental support. Partly offsetting these positive rating factors is the company's geographic concentration, which subjects it to regulatory and economic risks. Additionally, Ancón's ratings reflect the country risk associated with operating in Panama.
Ancón operates as the sixth-largest insurer in Panama, underwriting a diversified product mix targeting the local market. The company writes life insurance lines, health insurance, automobile, property/casualty lines and surety bonds. Property/casualty lines account for approximately 80% of Ancón's gross written premiums. Ancón works with independent agents, brokers and direct writers.
Ancón maintains an adequate level of risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio (BCAR). However, the company is exposed to major losses arising from its commercial property portfolio, although the risk is tempered by a strong reinsurance program that is placed with highly rated reinsurers.
Multinational Insurance Company, a subsidiary of Ancón, is a property/casualty insurer, which owns 47.79% of the shares of Multinational Life Insurance Company. Both companies are domiciled in Puerto Rico.
Factors that could lead to an upgrading of Ancon's ratings and a positive outlook are a sustainable long-term improvement in its underwriting performance and a reduced overall net exposure.
Factors that could lead to a downgrading of the company's ratings and a negative outlook are a material deterioration in capital from either lower than expected operating performance or claims due to a large catastrophic event, a reduced level of capital that does not support the ratings or an increase in net retention.
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. 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.