AM Best


AM Best Affirms Credit Ratings of MAPFRE Panamá S.A.


CONTACTS:

Salvador Smith
Financial Analyst
+52 55 1102 2720, ext. 108
salvador.smith@ambest.com

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - FEBRUARY 14, 2020 12:11 PM (EST)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of MAPFRE Panamá S.A. (MAPFRE Panamá) (Panama City, Panama). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect MAPFRE Panamá’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The ratings reflect MAPFRE Panamá’s strong risk-adjusted capitalization, the geographic and strategic importance of its Central America presence to Spain’s leading insurer, MAPFRE S.A. (MAPFRE Group), the integration of the MAPFRE Group’s practices and procedures into MAPFRE Panamá, as well as the synergies and operating efficiencies derived from being a group member. MAPFRE Panamá maintained its market position in 2019, having ranked as Panama’s third-largest insurer in 2019. Partially offsetting these positive rating factors are the competitive dynamics that persist in Panama’s property/casualty (P/C) segment despite healthier growth rates.

MAPFRE Panamá ranked second among Panama’s health insurers and third in the country’s auto and P/C segments. While Panama’s insurance industry showed signs of contraction in 2019, MAPFRE Panamá grew 3.7% during this period, after recovering from 2.8% decline in 2018. Fluctuations in growth are explained by a material decrease in assumed reinsurance business led by the growing competition from the bancassurance sector in 2018.

MAPFRE Panamá’s solid capital level and good reserve position provide a solid base for financial flexibility and strong risk-adjusted capitalization levels. AM Best expects that the company’s ERM practices and procedures implemented from the MAPFRE Group will continue to affect MAPFRE Panamá’s future performance positively.

MAPFRE Panamá’s combined ratio for 2019 improved to 95.3% due to lower loss ratio, as underwriting, mainly in the health and automobile business lines, was adjusted to reflect its risk experience. Administrative and acquisition expenses have remained stable and well-contained.

The strong competitive environment in Panama’s insurance market, especially in segments in which MAPFRE Panamá has leading positions, continues to generate challenging conditions and has increased risk appetites across the industry, presenting operating performance challenges in specific segments such as auto, individual life and health.

Positive rating actions taken on its ultimate parent, MAPFRE S.A., also could result in further positive rating actions for MAPFRE Panamá. Negative rating actions could result from a significant reduction in MAPFRE Panamá’s risk-adjusted capitalization, either by constant deterioration in its underwriting performance or unexpected losses that result in a level that no longer supports the current ratings, or if the company deviates significantly from the policies, practices and benefits assumed from its association with MAPFRE Group. Additionally, negative rating actions at its ultimate parent could lead to a downgrade of MAPFRE Panamá ratings.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the ratin process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:


  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

  • Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017)

  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Universal BCAR (Version May 23, 2019)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Guide to Best’s Credit Ratings.


  • Previous Rating Date: Feb. 14, 2019

  • Date Range of Financial Data Used: Dec. 31, 2014- Dec. 31, 2019

This press release relates to rating(s) that have been published on AM Best’s website. For additional 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 AM Best’s Recent Rating Activity web page.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.


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AMB# Company Name
086149 MAPFRE Panamá S.A.
085418 MAPFRE S.A.