OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “bbb+” (Good) of Cooperativa de Seguros Multiples de Puerto Rico (CSM) (San Juan, PR). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect CSM’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 (ERM).
The rating upgrades reflect the revision of CSM’s ERM assessment to appropriate from marginal, following management’s actions to strengthen ERM capabilities in recent years. These actions included an increase in reinsurance protection for tail events, the implementation of more stringent underwriting standards and improved claims procedures, as well as improved exposure management and stress testing. CSM’s commitment to strengthening its ERM program has shown improved ability to manage its risks and more closely align capabilities with its risk profile.
CSM’s balance sheet is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), favorable liquidity metrics and conservative investment risks. Operating performance remains adequate, driven by favorable results in recent years and by the implementation of underwriting initiatives that include rate increases and expense management strategies. The business profile is limited due to its geographic concentration in Puerto Rico, which exposes policyholder surplus to weather-related losses, strong competition and regulatory challenges.
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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