OLDWICK, N.J. — (BUSINESS WIRE) — #insurance—AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb” (Good) of Óptima Seguros (San Juan, PR). The outlook of the FSR is stable.
The Credit Ratings (ratings) reflect Óptima Seguros’ balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The positive outlook is predicated on anticipated improvement in the balance sheet strength of Óptima Seguros, which reflects management’s ability to generate profits, grow policyholder surplus and improve its level of risk-adjusted capital. Over its recent history, management has successfully re-balanced the company’s book of business, significantly reduced its catastrophe exposure, while at the same time growing the size of its book and policyholder surplus levels. Reinsurance recoverable balances on the company’s older legacy reserves have also been declining, resulting in less credit risk exposure.
The operating performance assessment considers Óptima Seguros’ renewed emphasis on small to medium commercial enterprises, continued efforts to further develop its former agency relationships, and management’s ability to successfully execute on its plans and strategy in the upcoming years. The business profile assessment considers the company’s limited geographic profile, as well as some of the competitive headwinds in an already saturated and mature market. In addition, management has established its own ERM framework and has set specific risk tolerances and risk appetites in conjunction with its current business plan.
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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