A.M. Best Affirms Ratings of MAPFRE PRAICO Group

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit ratings (ICR) of “a+” of MAPFRE PRAICO Group and its members, which consist of the lead company, MAPFRE PRAICO Insurance Company and its wholly owned subsidiary, MAPFRE Preferred Risk Insurance Company, as well as an affiliate company, MAPFRE Pan American Insurance Company, whose businesses are significantly reinsured by MAPFRE PRAICO Insurance Company. The outlook for all ratings is stable. All companies are domiciled in San Juan, Puerto Rico.

The ratings reflect MAPFRE PRAICO Group’s excellent capitalization, strong operating performance through solid investment income and profitable underwriting results, and established market presence within Puerto Rico. The group maintains a conservative underwriting philosophy as well as a comprehensive reinsurance program, which protect surplus from shock losses and enhances stability of earnings. Management remains conservative in establishing reserve estimates as evidenced by favorable calendar year reserve development over the long term.

The ratings also reflect the group's solid brand name and integral role as a member of MAPFRE S.A., the largest insurance group in Spain.

Partially offsetting these positive rating factors is the group's geographic concentration of risk, which potentially exposes capital to frequent and severe weather-related events. Operating almost exclusively within Puerto Rico, results also remain exposed to potential changes within the judicial, regulatory and economic climate. The economic recession that began in 2006 continues, which places additional pressure on the group's premium growth and sustainability of profit levels. The Puerto Rico insurance market remains very competitive as local insurers challenge each other for market share, particularly within the commercial lines, which are unregulated. Nevertheless, MAPFRE PRAICO Group is one of the top three property writers on the island and continues to develop products and platforms that should benefit future earnings and capital appreciation.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Company
Analysts
Gordon McLean, 908-439-2200, ext. 5304
[email protected]
or
Michelle Baurkot, 908-439-2200, ext. 5507
[email protected]
or
Public Relations
Rachelle Morrow, 908-439-2200, ext. 5378
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
[email protected]

Source: A.M. Best Company