The ratings reflect Gsalud’s good risk-based capitalization, strong operating performance and supportive reinsurance program. Historically, Gsalud has been able to increase capital and achieve favorable results based on its consistent underwriting profit. Offsetting these positive rating factors are Gsalud’s concentration in one business line and the highly competitive health insurance market.
Gsalud is a fully owned subsidiary of
Based on Best’s Capital Adequacy Ratio (BCAR), Gsalud’s capitalization is good and supportive of the ratings. The subsidiary is mainly susceptible to underwriting risk as it retains almost 100% of its premiums. The company’s strong underwriting practices have resulted in positive technical performance with no dependence on investment revenue to achieve positive bottom line results during the past three years. This translated into solid and improved profitability that was reflected in a 15.5% return on equity in 2015.
The company’s investment policies are conservative, providing a steady flow of revenue to support its positive operating results. Moreover, the company benefits from being integrated into the Peña Verde, S.A.B. group, gaining operational leverage through common systems, procedures and enterprise risk management practices.
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.
Key insurance criteria reports utilized:
- A.M. Best’s Ratings On a National Scale (Version
Sept. 5, 2014)
- Analyzing Insurance Holding Company Liquidity (Version
March 25, 2013)
- Evaluating Country Risk (Version
May 2, 2012)
Insurance Holding Companyand Debt Ratings (Version May 6, 2014)
- Rating Members of Insurance Groups (Version
Dec. 15, 2014)
- Risk Management and the Rating Process for Insurance Companies (Version
April 2, 2013)
- Understanding Universal BCAR (Version
April 28, 2016)
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 “Understanding Best’s Credit Ratings.”
- Previous Rating Date: Not rated
- Date of Financial Data Used:
September 30, 2016
This press release relates to rating(s) that have been published on
While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed.
A.M. Best’s credit ratings are independent and objective opinions, not statements of fact.
Copyright © 2016 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
Associate Financial Analyst
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