AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of Maxseguros EPM. The outlook of these credit ratings is stable. Maxseguros is a single-parent captive insurer owned by Empresas Públicas de Medellín E.S.P. (EPM), the Colombian power generation and multi-utility company. AM Best says the ratings reflect Maxseguros’ balance sheet strength, which it assesses as “strongest”, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect Maxseguros’ risk-adjusted capitalisation being at the strongest level, as measured by Best’s capital adequacy ratio. It is supported by a comprehensive and adequate reinsurance programme, coupled with a conservative investment policy and limited premium risk exposure. Additionally, Best adds the ratings recognise the captive’s role within its corporate parent structure. Maxseguros provides reinsurance to the EPM group, covering property damage and business interruption, commercial crime, cyber risk, directors and officers, errors and omissions and general liability exposures. “These positive rating factors are offset partially by EPM’s substantial financial leverage and Maxseguros’ limited business and market scope. This is mitigated somewhat by the company’s stable results, favourable geographic spread of risk and the history of Maxseguros’ growing surplus position,according to Best.
