A.M. Best Affirms Ratings of Reaseguradora Patria, S.A.B.

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Reaseguradora Patria, S.A.B. (Patria Re) (Mexico). The outlook for both ratings is stable.

The ratings reflect Patria Re’s solid risk-adjusted capitalization, consistent overall underwriting performance in recent years and management's local and regional market expertise. Patria Re is a reinsurer mainly in the Latin American and Caribbean markets and is focused on the prudent management of its underwriting risk in these regions.

As a result of its comprehensive domestic and regional knowledge, Patria Re has established a strong niche position in Mexico and Latin America, which allows it to selectively accept profitable business while maintaining a diversified product portfolio tailored to specific markets. This strategy has resulted in favorable overall underwriting results in recent years, and Patria Re has continued to enhance its risk-adjusted capitalization.

Partially offsetting these favorable rating factors is Patria Re's limited financial flexibility, elevated expense structure, which is driven by acquisition costs associated with its portfolio mix, concentration of equity holdings in its investment portfolio and exposure to frequent and severe catastrophic losses. In addition, Patria Re's risk profile has changed in recent years as a result of its exposure to European and Asian risks. While this affords Patria Re some additional geographic diversification in its operations, it is accepting risk in relatively new markets. A.M. Best will continue to closely monitor Patria Re's experience with these contracts for any adverse developments.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Understanding Universal BCAR”; “Natural Catastrophe Stress Test Methodology”; and “Assessing Country Risk.” Methodologies 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 © 2011 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Ricardo Longchallon, 908-439-2200, ext. 5676
Senior Financial Analyst
[email protected]
or
Peter Dickey, 908-439-2200, ext. 5053
Assistant Vice President
[email protected]
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Co.