AM Best Affirms Credit Ratings of Popular Life Re

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Popular Life Re (PLRe) (Puerto Rico). PLRe is a life insurance subsidiary of its ultimate parent, Popular, Inc. [NASDAQ: BPOP], a publicly traded bank holding company based in Puerto Rico. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect PLRe’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The weak credit profile of ultimate parent, Popular, Inc., continues to have a drag on the ratings lift/drag reflected in PLRe’s ratings.

PLRe’s balance sheet strength is driven by the strongest assessment, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as a high quality and highly marketable investment portfolio, which lends to a strong liquidity position. PLRe remains strategically important to Popular, Inc., although the earnings contribution to the parent company is modest. Additionally, the company reinsures a portion of credit insurance policies on consumer loans originated at Banco Popular de Puerto Rico, as well as personal accident and health policies underwritten by unaffiliated insurers.

The company’s limited business profile offsets the favorable rating factors. There has been limited growth of business over the long term, which has been attributed to a series of natural events that include hurricanes and earthquakes, with the COVID-19 pandemic also creating economic strain on the island. With the release of funds earmarked from prior growth initiatives following Hurricane Maria, the economic forecasts lend to a more positive market condition over the extended future periods, and opportunities to grow business for PLRe may follow.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Wayne Kaminski
Senior Financial Analyst

+1 908 439 2200, ext. 5061

wayne.kaminski@ambest.com

Edward Kohlberg
Director

+1 908 439 2200, ext. 5664

edward.kohlberg@ambest.com

Christopher Sharkey
Associate Director, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Al Slavin
Senior Public Relations Specialist

+1 908 439 2200, ext. 5098

al.slavin@ambest.com

Source: AM Best