AM Best Revises Outlooks to Positive for Pacífico Compañía de Seguros y Reaseguros S.A.
December 06 2019 - 12:08PM
Business Wire
AM Best has revised the outlooks to positive from stable
and affirmed the Financial Strength Rating of A- (Excellent) and
the Long-Term Issuer Credit Rating of “a-” of Pacífico Compañía de
Seguros y Reaseguros S.A. (PCS) (Lima, Perú).
The ratings reflect PCS’s balance sheet strength, which AM Best
categorizes as strongest, as well as its adequate operating
performance, neutral business profile and appropriate enterprise
risk management (ERM).
The revision of the outlooks to positive reflects the gradual
strengthening of PCS’ balance sheet after achieving capital
efficiencies from the consolidation of its property/casualty (P/C)
and life operations, as well as improving economic conditions in
Peru. AM Best expects that the company’s risk-adjusted
capitalization will remain supported by its appropriate ERM.
The ratings of PCS also reflect the company’s strong market
share in Peru’s insurance market, as well as its comprehensive and
well-diversified reinsurance program. Limiting the ratings is
Peru’s competitive landscape within the company’s key segments such
as auto, health and life, which have a limited number of insurers
when compared with more developed insurance markets.
PCS is Peru’s second-largest insurer with a market share of
26.2%. As of October 2019, the company’s business portfolio was
composed of 53% life and 47% non-life. Its ultimate parent is
Peru’s largest financial holding company, Credicorp Ltd. [NYSE:
BAP], which had USD 52.6 billion in assets as of December 2018.
After two years of consolidating its life and property/casualty
(P/C) business into PCS, the company has maintained its
risk-adjusted capitalization at the strongest level, as measured by
Best’s Capital Adequacy Ratio (BCAR). PCS benefits from risk
mitigation achieved through diversification and a robust and
comprehensive reinsurance program with highly rated reinsurers.
PCS has maintained adequate operating performance, with
life-side investment products contributing to the result, while P/C
products have performed significantly well with positive technical
results despite a lower level of new car sales in the auto segment.
Historically, the company has reported healthy growth rates despite
diverse market events in recent years.
Positive rating actions could take place if the company is able
to maintain its risk-adjusted capitalization at the strongest
level, as measured by Best’s Capital Adequacy Ratio, supported by
consistent operating results and appropriate ERM.
Negative rating actions could take place if the company’s
underwriting results weaken due to relaxed underwriting standards
or a more aggressive risk appetite that could erode capital to
levels that no longer support the net required capital for the
risks the company faces.
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 Understanding
Best’s Credit Ratings. For information on the proper media use of
Best’s Credit Ratings and AM Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data provider specializing in the insurance industry. The company
does business in more than 100 countries. Headquartered in Oldwick,
NJ, AM Best has offices in cities around the world, including
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For
more information, visit www.ambest.com.
Copyright © 2019 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Elí Sánchez Associate Director +52 55 1102
2720, ext. 122 eli.sanchez@ambest.com
Alfonso Novelo Senior Director, Analytics +52
55 1102 2720, ext. 107 alfonso.novelo@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy Director, Public Relations +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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