A.M. Best Revises Outlook to Positive for Multinational Life Insurance Company [Manufacturing Close – Up]

A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B+ (Good) and issuer credit rating of "bbb-" of Multinational Life Insurance Company (MLIFE) (Hato Rey, Puerto Rico).

MLIFE markets a diversified product portfolio primarily through personal producing agents, general agents, brokers and direct marketing. A general portfolio of ordinary life, group life, credit life and accident and health insurance products are marketed and sold predominantly in Puerto Rico. MLIFE's health business is concentrated in cancer, disability income and accident policies.

The positive outlook reflects MLIFE's financial and managerial support and the commitment from MLIFE's parent, Multinational Insurance Company, a wholly owned subsidiary of Aseguradora Ancon SA, an insurer domiciled in Panama, ultimately owned by Tobias Carrero Nacar.

A capital infusion from the owners in the form of preferred stock in 2011, coupled with substantially improved operating results beginning in 2012, enabled MLIFE's capitalization to increase to more appropriate levels. A number of management initiatives have been put into place, including meaningful cost savings, which have contributed to the company's return to profitability. A.M. Best believes MLIFE will continue to generate positive operating earnings, which are expected to retain the current rating level.

Partially offsetting these strengths include a history of unprofitable results, declining premium trends and challenges associated with rebuilding a brand and generating sustained profitable premium growth in MLIFE's core Puerto Rico marketplace.

Key rating factors that could result in positive rating actions include continued growth in MLIFE's risk-adjusted capitalization, maintenance of favorable operating results and the continued support of the new owners. Factors that could result in negative rating actions include a decrease in risk-adjusted capitalization or total capital, operating losses and reduced support from the new owners.

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: ambest.com/ratings/methodology.

A.M. Best Company is an insurance rating and information source.

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