Best’s News & Research Service - January 20, 2017 04:07 PM (EST)
A.M. Best Affirms Credit Ratings of Popular Life Re
- January 20, 2017 04:07 PM (EST)
Oldwick //BestWire// - A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Popular Life Re (PLRE) (Puerto Rico). PLRE is a life insurance subsidiary of its ultimate parent, Popular Inc. [NASDAQ: BPOP], a publicly traded bank holding company based in Puerto Rico. The outlook of these Credit Ratings (ratings) remains stable.
The rating affirmations reflect PLRE’s stable statutory income, history of capital generation from the insurance operations and modest premium growth. Historically, the company has been able to maintain strong risk-based capital levels while demonstrating the ability to pay dividends to the parent. While premium volumes continue to show modest improvements, the company’s premium growth potential is highly correlated to Puerto Rico’s economy.
A.M. Best considers PLRE to be an important subsidiary of Popular Inc. PLRE reinsures a portion of credit policies on consumer loans originated at Banco Popular de Puerto Rico, as well as personal accident and health policies underwritten by unaffiliated insurers.
Offsetting these positive rating factors is the strain at the banking parent due to continued weakness in the parent’s primary banking market in Puerto Rico. While recent improvement is noted in the overall balance sheet and operating profile of Popular, Inc., improvement in economic conditions within the Puerto Rico economy, along with continued positive trends in financial metrics at the parent, needs to be realized before any rating action can be taken with regard to PLRE.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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