OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has assigned a financial strength rating of A- (Excellent) and issuer credit rating of “a-” to Aseguradora Ancon, S.A. (Ancon) (Panama). The outlook assigned to both ratings is stable.

The ratings reflect Ancon’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 risk. Additionally, Ancon’s ratings reflect the country risk associated with its operation in Panama.

Ancon operates as the fifth-largest insurer in Panama, underwriting a diversified product mix targeting the local market. The company writes life insurance lines, health insurance, automobile, property/casualty and surety bonds. Property/casualty lines account for approximately 80% of Ancon’s gross written premiums. The company only writes business in Panama and has nine offices located throughout the country. Ancon works with independent agents, brokers and direct writers.

Ancon maintains an adequate level of risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR), which is exposed to major losses arising from its commercial property portfolio. However, the risk is tempered by a strong reinsurance program that is placed with highly rated reinsurers.

In 2011, Ancon purchased 100% of the shares of Multinational Insurance Company (MIC), a property/casualty insurer domiciled in Puerto Rico. MIC owns 96.6% of the shares of Multinational Life Insurance Company, also domiciled in Puerto Rico.

Factors that could lead to a positive outlook or an upgrading of Ancon’s ratings are sustainable long-term improvement in underwriting performance and reduced overall net exposure.

Factors that could lead to a negative outlook or a downgrading of the company’s ratings are a material deterioration of 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. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “Evaluating Country Risk”; “Catastrophe Analysis in A.M. Best Ratings”; and “Rating Members of Insurance Groups.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Janet Hernandez
Senior Financial Analyst
908-439-2200, ext. 5767
janet.hernandez@ambest.com
or
Rachelle Morrow
Senior Manager, Public Relations
908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Steven Chirico, CPA
Assistant Vice President
908-439-2200, ext. 5087
steven.chirico@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
james.peavy@ambest.com

Source: A.M. Best Co.