AM Best Affirms Credit Ratings of Worldwide Medical Assurance, Ltd. Corp.

MEXICO CITY--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Worldwide Medical Assurance, Ltd. Corp. (WWMA) (Panama City, Panama). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect WWMA’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

WWMA’s sustained balance sheet strength, underpinned by risk-adjusted capitalization maintained at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), supports the rating affirmations in conjunction with AM Best’s expectations that profitability will continue to help increase the company’s capital base.

The ratings also reflect WWMA’s consistently strong operating performance, supported by sound underwriting practices and a conservative investment strategy, while maintaining its successful gradual expansion into other Latin American markets. These strengths are offset by the increased underwriting risk resulting from a change in the company’s retention profile, its ability to implement growth targets, and the highly competitive landscape in Latin America’s life and health insurance segments.

The company began operations in 1999 and has since grown successfully in its niche market, providing insurance for clients traveling overseas to receive medical attention. This is achieved through a mix of brokers, bancassurance and direct distribution channels. WWMA benefits from its partial ownership by KfW DEG, the German development bank, through its holding company, Worldwide Group, Inc. In recent years, WWMA has expanded operations into other Latin American markets such as Guatemala, Bolivia, Paraguay, and most recently has moved toward starting operations in Colombia.

WWMA’s model of optimizing the selection of medical care providers is backed up by a reinsurance program placed with highly rated counterparties, supporting its strategy of global expansion and further development of its book of business. In April 2020, an adjustment was made to the reinsurance structure of the health business line, moving toward higher retention. AM Best will continue monitoring the effect of this change on the company’s operating performance metrics and risk-adjusted capitalization.

Historically, WWMA has maintained positive capital-creation capacity, which, along with a conservative strategy of reinvesting profits, has contributed to its strongest level of risk-adjusted capitalization, as measured by BCAR. Capital management is strengthened further by a capital contribution of USD 5 million, made with the purpose to support the shift in the asset structure after the integration of an intangible asset corresponding to contracts for a medical providers network from the sister company, WW Concierge Healthcare Services, Ltd. (WCHS).

WWMA’s strong underwriting and stringent expense practices translate into consistent premium sufficiency metrics. Moreover, WWMA’s synergies with its sister company in the Dominican Republic, in conjunction with periodic adjustments to its reinsurance structure, have helped optimize the company´s underwriting. These measures, combined with stable financial products, have resulted in sustained profitability indicators, such as return on equity and return on assets, which stood at 7.5% and 2.3%, respectively, at year-end 2021.

As of June 2022, the company posted USD 630,000 in net income, showing an increase in the loss ratio with respect to past operating performance results, and continuing the trend in WWMA’s increased business retention.

Positive rating actions are not expected in the medium term. Negative rating actions could take place if significant changes in the company’s strategy cause a negative effect in its income-generating profile or if the risk-adjusted capitalization deteriorates to levels no longer consistent with the strongest assessment.

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 © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Olga Rubo, FRM

Senior Financial Analyst

+52 55 1102 2720, ext. 134

[email protected]

Eli Sanchez
Associate Director, Analytics

+52 55 1102 2720, ext. 122

[email protected]

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Al Slavin
Communications Specialist

+1 908 439 2200, ext. 5098

[email protected]

Source: AM Best