A.M. Best Places Credit Ratings of ASSA Compañía de Seguros S.A. Under Review With Negative Implications

MEXICO CITY--(BUSINESS WIRE)-- A.M. Best has placed under review with negative implications the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of ASSA Compañía de Seguros S.A. (ASSA) (Panama City, Panama), following its announced acquisition of the Panama insurance operations wholly owned by Assicurazioni Generali S.p.A. (Generali) (Italy) [Borsa Italiana: Generali].

The action follows the Aug. 7, 2017, announcement that ASSA has entered into an asset purchase agreement to fully acquire Generali’s insurance operations in Panama. The transaction is subject to regulatory approvals in Italy and Panama.

While this transaction strengthens the group’s business profile in Panama, the under-review status reflects the potentially increased pressure this transaction could put on ASSA’s risk-adjusted capitalization and financial leverage if there is any deviation from the planned funding structure for the acquisition. The under-review status also acknowledges the potential strong market share the company could achieve once the Generali operations are integrated into ASSA. ASSA is the main insurance operating company of ASSA Compañía Tenedora, S.A., in terms of its earnings contribution.

A.M. Best anticipates that ASSA’s ratings likely will remain under review through the completion of the transaction. Any material changes to ASSA’s financial profile will be reviewed to assess the impact on its Credit Ratings.

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:

• Analyzing Insurance Holding Company Liquidity (Version March 25, 2013)
• Catastrophe Analysis in A.M. Best Ratings (Version Nov. 3, 2011)
• Evaluating Country Risk (Version May 2, 2012)
• Insurance Holding Company and 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 May 1, 2017)

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: March 8, 2017
• Date of Financial Data Used: March 31, 2017

This press release relates to rating(s) that have been published on A.M. Best's website. For additional 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.

A.M. Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. A.M. Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, A.M. Best cannot attest as to the accuracy of the information provided.

A.M. Best’s credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

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A.M. Best

Elí Sánchez, +52-55-1102-2720, ext. 108

Senior Financial Analyst

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Alfonso Novelo, +52-55-1102-2720, ext. 107

Senior Director, Analytics

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Source: A.M. Best