Maxseguros EPM has had its financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” affirmed by ratings agency A.M. Best.
Maxseguros is a single-parent captive insurer wholly owned by Empresas Publicas de Medellin (EPM), which provides reinsurance to the EPM group, covering property damage and business interruption, commercial crime, directors and officers, and construction liability exposures.
The ratings reflect the captives balance sheet strength, categorised by A.M. Best as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
Additionally, they are reflective of Maxseguros’ strong risk-adjusted capitalisation coupled with conservative balance sheet strategies, as conservative investment policy and limited premium risk exposure.
The ratings also recognise the support of the captive’s parent, EMP, which is owned by the Colombian municipality of Medellin and is the largest power generation and multi-utility company in Colombia.
According to the ratings agency, the positive rating factors are offset partially by Maxseguros’ limited business and market scope, which is somewhat mitigated by the company’s stable results, favourable geographic spread of risk and the history of the captive’s growing surplus position, as well as its ultimate parent, EPM.
A.M. Best added: “Additionally, while Maxseguros depends on reinsurance, EPM’s senior management is involved intimately in the captive’s operations.”
The outlook of these ratings is stable, due to Maxseguros’ ability to maintain a strong level of operating performance as a result of its demonstrated risk management expertise and conservative underwriting criteria.
In both 2016 and 2017, this held true and the company presented net claims while also producing constant positive bottom line results.
A.M. Best has a favourable view of Maxseguros’ overall profile within the ultimate parent’s structure and recognises the benefits gained from this, particularly from the active involvement of EPM senior management.