A.M. Best Affirms Credit Ratings of Reaseguradora Patria, S.A.
The ratings reflect Patria Re’s balance sheet strength, which
Patria Re’s balance sheet strength is underpinned by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The ratings also reflect its low underwriting leverage, improving operating performance, comprehensive enterprise risk management infrastructure and expansive knowledge of its core markets in
Offsetting these strengths is Patria Re’s relatively important participation of equities in its investment portfolio and some catastrophe-prone lines of business, which could create volatility in the company’s operating performance.
Patria Re has established a solid niche position in
At year-end 2017, the company registered an increase in return on equity and return on assets of 2.9% and 1.4%, respectively, mainly driven by improvements in underwriting and investments results. Stable claims and management expenses, coupled with equities short, helped to improve the company’s operating performance.
While Patria Re holds a larger percentage of its investment portfolio in equities in comparison with other peers, which could lead to higher volatility in its financial income, the company historically has maintained such positions and has kept a long-term investment horizon for these assets. Given its prudent reserve practices and strong capital position, the company has not been required to materialize any unrealized losses from any of these investments to cover unusual deviations in claims arising from its catastrophe-prone portfolio.
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
Oct. 13, 2017 ) - Available Capital & Holding Company Analysis (Version
Oct. 13, 2017 ) - Catastrophe Analysis in A.M. Best Ratings (Version
Oct. 13, 2017 ) - Evaluating Country Risk (Version
Oct. 13, 2017 ) - Understanding Universal BCAR (Version
May 14, 2018 )
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:
Oct. 5, 2017 - Date of Financial Data Used:
June 30, 2018
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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