Content and data provided by various third parties and Fidelity - Terms of Use
Print.Print
Small font size A Larger text size A Largest text size A

AM Best Affirms Credit Ratings of Reaseguradora Patria, S.A.

BY Business Wire | CORPORATE | 11/01/24 04:06 PM EDT

MEXICO CITY--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of A (Excellent), the Long-Term Issuer Credit Rating (Long-Term ICR) of ?a? (Excellent) and the Mexico National Scale Rating of ?aaa.MX? (Exceptional) of Reaseguradora Patria, S.A. (Patria Re) (Mexico). AM Best also has affirmed the Long-Term ICR of ?bbb? (Good) of Patria Re?s ultimate parent, Pe?a Verde, S.A.B. (Pe?a Verde) (Mexico). The outlook of these Credit Ratings (ratings) is stable. Per AM Best?s criteria procedure on insurance holding companies, Pe?a Verde?s rating reflects a standard notching from Patria Re?s Long-Term ICR.

The ratings reflect Patria Re?s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The stable outlooks reflect Patria Re?s ability to maintain stable profitability metrics along with a strongest level of risk-adjusted capitalization, as measured by Best?s Capital Adequacy Ratio (BCAR), while implementing its business expansion strategy.

Patria Re?s balance sheet assessment of strongest is supported by that same assessment on the company?s level of risk-adjusted capitalization, low underwriting leverage, a robust reinsurance program and strong liquidity metrics. The ratings also reflect its comprehensive ERM infrastructure and expansive knowledge of its core markets in Latin America, which reflects the company?s smooth implementation of its expansion strategy with a stable overseas operation outside its niche market.

Patria Re has established a solid niche position in Mexico and in other Latin America markets, which allows it to accept profitable business selectively while maintaining a diversified product portfolio tailored to specific markets. This strategy has resulted in consistently favorable underwriting results over the years and has contributed to Patria Re?s enhanced level of risk-adjusted capitalization. A well-balanced reinsurance program placed among counterparties with a strong security level also reinforces the company?s risk-adjusted capitalization.

Despite limitations posted by catastrophe reserve development, Patria Re reported positive bottom-line results in 2023, mainly driven by favorable underwriting results. The company?s strong underwriting practices allowed Patria Re to absorb the impact of Hurricane Otis without significant increases in its loss ratio and maintain good levels of premium sufficiency during 2023. Their efforts to maintain stable claims and management expenses have resulted in a profitable first six months for 2024; however, it remains limited by catastrophe reserve development.

Factors that could lead to positive rating actions for the company include a consistent improvement in profitability metrics, while maintaining its strongest level of risk-adjusted capitalization, as well as the continued and successful operation of its overseas expansion. Factors that may lead to negative rating actions include a sustained decline in profitability, as well as a significant deterioration in risk-adjusted capitalization, driven either by unfavorable results or a significant cash withdrawal.

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 ? 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Source: AM Best

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

© 1998 – 2014 FMR LLC.

All rights reserved.
fir_news_article