OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has commented that the financial strength ratings
(FSR) of A (Excellent) and issuer credit ratings of “a” of the members
of MAPFRE USA Group (MAPFRE USA) are unchanged following the
recent market volatility surrounding Spain’s economic conditions,
derived from uncertainty underpinning the country’s banking sector. The
lead company in MAPFRE USA is The Commerce Insurance Company
(Webster, MA) and includes its inter-company pool members, Citation
Insurance Company(Webster, MA),Commerce West Insurance Company
(Pleasanton, CA), American Commerce Insurance Company (Columbus,
OH), MAPFRE Insurance Company of New York (Garden City, NY), MAPFRE
Insurance Company of Florida (Miami, FL) and MAPFRE Insurance
Company (Florham Park, NJ).
This comment corresponds with the comment A.M. Best Europe – Rating
Services Limited has made in relation to the ratings of MAPFRE
RE, Compania de Reaseguros, S.A. (MAPFRE RE) (Spain), a key
subsidiary of MAPFRE S.A. (Spain), the ultimate parent of the
members of MAPFRE USA Group, and follows the announcement that Spain
will borrow up to EUR 100 billion from the European Financial Stability
Facility or the European Stability Mechanism, to recapitalize its banks.
In A.M. Best’s view, the perceived reduction in financial flexibility of
the Spanish sovereign does not have an immediate and direct impact on
the rating fundamentals of MAPFRE RE. This view is supported by stress
tests undertaken on the company’s risk-adjusted capitalization, with
results remaining within A.M. Best’s tolerance levels. However, the high
level of investments in Spanish sovereign and financial institutions
debt remains a concern, together representing 153% of MAPFRE S.A.’s
shareholders’ funds as at the first quarter of 2012. A.M. Best
acknowledges that there are outstanding uncertainties relating to the
terms of the EUR 100 billion loan and the external audits of Spain’s
banking sector, and may take negative actions on the ratings in the
event of further erosion to Spain’s sovereign creditworthiness.
On June 6, 2012, A.M. Best downgraded the issuer credit rating to “a”
from “a+” and affirmed the financial strength rating of A (Excellent) of
the members of MAPFRE USA Group. All ratings were removed from under
review with negative implications and assigned a negative outlook.
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 BCAR for Property/Casualty Insurers”;
“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.Jacqalene Catrino Lentz,908-439-2200,
ext. 5762Senior Financial Analystjacqalene.email@example.comGreg
Williams,908-439-2200, ext. 5815Managing Senior
Morrow, 908-439-2200, ext. 5378Senior Manager, Public
Peavy, 908-439-2200, ext. 5644Assistant Vice President,
Source: A.M. Best Co.