AM Best Revises Outlooks to Positive for Compañía Reaseguradora del Ecuador S.A.; Affirms Credit Ratings
AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Compañía
The ratings reflect Ecua Re’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The positive outlooks result from the strengthening of the company’s capital position, backed by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR).
Ecua Re was established in 1977 and is the only domestic reinsurer operating in
The company’s largest shareholder is Hannover Re, which has a 30% ownership stake via its wholly owned subsidiary,
Ecua Re’s balance sheet strength is considered very strong, as risk-adjusted capitalization reflects the company’s ability to manage its risk exposures, supported by a comprehensive reinsurance program led by Hannover Re. Furthermore, the company gains financial flexibility through an
AM Best views the company’s operating performance as strong, given its consistent positive technical performance during the past five years. Additionally, its retrocession profile provides revenue from ceding commissions and mitigates claim costs, as experienced in the 2016 earthquake. As of
Positive rating actions could take place if the company can increase its capital base in a stable manner while achieving the strongest level of risk-adjusted capitalization, as measured by BCAR. Negative rating actions could take place if the company's operating performance deteriorates to levels no longer supportive of the strong assessment either through market developments or changes in underwriting.
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.
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Source: AM Best
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