A.M. Best Affirms Ratings of MAPFRE PRAICO Group Members

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit rating of “a” for MAPFRE PRAICO Insurance Company, its wholly owned subsidiary, MAPFRE Preferred Risk Insurance Company, and an affiliate, MAPFRE Pan American Insurance Company, collectively known as the MAPFRE PRAICO Group (MPG). The outlook for all ratings is stable. All companies are domiciled in San Juan, Puerto Rico.

The ratings reflect MPG's excellent capitalization, solid operating performance historically driven by investment income, long history of profitable underwriting results, established market presence within Puerto Rico and strong risk management practices. The ratings also reflect MPG's strong brand-name recognition within the Puerto Rico market and integral role as a member of MAPFRE S.A. (MAPFRE), the largest insurance group in Spain.

Partially offsetting these positive rating factors is MPG's geographic risk concentration, which exposes capital to the potential for frequent and severe weather-related events. Additionally, operating almost exclusively within Puerto Rico exposes results to potential changes within the judicial, regulatory and economic climate. Despite the concerns, the outlooks reflect MPG's excellent risk-adjusted capital position, solid operating results delivered over the long term, as well as the stabilizing economic conditions within Spain, to which MPG's ultimate parent organization, MAPFRE, has material investment and business exposure.

MAPFRE has a strong level of risk-adjusted capitalization and has generated robust overall earnings in recent years, despite extremely challenging economic conditions in its local market. MAPFRE remains heavily exposed to the Spanish economy. Although Spain is a core insurance market for MAPFRE, its operations are well diversified geographically, particularly in the Americas. Furthermore, MAPFRE's Spanish insurance business has been resilient and continues to perform strongly.

A.M. Best feels the current ratings of MPG are properly positioned and does not anticipate upward movement over the near term. However, upward rating movement could occur should recent improvement in operating performance be sustained at a level that outperforms the industry composite.

However, negative rating actions could occur should risk-adjusted capitalization weaken considerably due to investment losses, a significant increase in catastrophe-related losses, or a significant, sustained deterioration in operating performance. Additional negative rating factors that could impact the ratings of MAPFRE PRAICO Group include a deterioration in economic conditions in Spain, which would in turn heighten MAPFRE's country risk due to deterioration in the Spanish economy, a weakening in the MAPFRE's business and financial profile or a deterioration in the risk-adjusted capitalization.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Catastrophe Analysis in A.M. Best Ratings
• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance Companies
• Understanding BCAR for Property/Casualty Insurers

This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best Company
Gordon McLean, (908) 439-2200, ext. 5304
Senior Financial Analyst
[email protected]
or
Gerard Altonji, (908) 439-2200, ext. 5626
Assistant Vice President
[email protected]
or
Christopher Sharkey, (908) 439-2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, (908) 439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company

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