A.M. Best has affirmed the financial strength rating (FSR) of “A” (Excellent) and the issuer credit rating (ICR) of “a” of ASSA Compañía de Seguros, of Panama City, Panama.
The agency has also affirmed the FSR of “A-“ (Excellent) and the ICRs of “a-” of Lion Reinsurance Company of Bermuda and Reaseguradora America SPC (RAM Re) of the Cayman Islands. The outlook for all ratings is stable.
All companies are ultimately owned by Grupo ASSA, a financial services holding company publicly traded on the Panama Stock Exchange.
A.M. Best has stated that the ratings reflect ASSA’s consistent “excellent operating results, strong capitalisation and a defined business profile”. ASSA maintains a diversified book of business that includes both property and casualty, and life and health products.
In conjunction with the captive affiliates, Lion Re and RAM Re; ASSA and the Grupo ASSA are able to maintain financial flexibility for their operations and strengthen relations with key clients, according to A.M. Best.
The performance of Lion Re has continued to improve during the past two years showing adequate combined ratios, increased positive bottom line results, and good prospects for growth, which are linked to the underwriting performance of its affiliates.
A.M. Best has said it expects Lion Re to maintain its good capital position and to improve its operating performance as the business it takes on becomes of “better quality”.
According to the agency, ASSA, Lion Re and RAM Re have demonstrated a solid business strategy, adequate operating performance and strong capitalisation levels.
The ratings do, however, take into account limiting factors such as ASSA’s risk concentration in a geographically limited insurance market, along with operating in a country that A.M. Best considers to have an elevated level of country risk, implementation risk for RAM Re’s strategy, maintenance of current trend in operating performance of Lion Re and competition within Panama’s market.
Negative rating triggers could include a significant decline in the company’s risk-based capitalisation, sustained adverse operating performance, or a downgrade in Panama’s country risk tier.
Drivers that could lead to an upgrade of the ratings and/or a positive outlook for Lion Re and RAM Re are stable underwriting performances, as well as reduced overall net exposure over the next few years and successful implementation of their business plans.
Factors that could lead to a downgrading of the ratings and/or a negative outlook are a material loss of capital from either claims or investments, a reduced level of capital that does not support their ratings or an increase in net retention.
