A.M. Best Upgrades Issuer Credit Rating of MAPFRE GLOBAL RISKS, Compañía Internacional de Seguros y Reaseguros S.A.
The ratings reflect MGR’s balance sheet strength, which
The Long-Term ICR upgrade reflects MAPFRE’s improved credit rating fundamentals, characterised by a very strong balance sheet, a strong operating performance, with solid earnings from its Spanish insurance and global reinsurance operations, and a favourable business profile. The sustained improvement in Spain’s macroeconomic conditions over recent years has also influenced the group’s rating fundamentals positively.
MGR’s balance sheet strength is underpinned by its risk-adjusted capitalisation being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), despite significant intragroup holdings, which incur high capital charges within the model. MGR benefits from good organic capital generation, with its shareholder having demonstrated a willingness to support the company by foregoing dividends in recent years. A.M. Best’s assessment also considers the high concentration within the investment portfolio to intercompany investments, as well as the company’s relatively high dependence on reinsurance due to its business model, which incorporates a number of fronting arrangements for captives.
The operating performance assessment factors in MGR’s strong historical performance up to 2016, which is offset partially by a recent increase in the volatility of underwriting results as the company continues to expand internationally. Technical performance in 2017 was impacted adversely by a significant increase in the level of both catastrophe and large losses, generating a combined ratio of 135.2%, as calculated by
MGR’s business profile is supported by a strong brand awareness, a recognised expertise, and long-standing relationships with clients. The restructuring of MGR, which is expected to be complete by
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
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