OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has commented that the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of MAPFRE PANAMA S.A. (Panama) are unchanged following the rating downgrades related to its parent company, MAPFRE S.A. (Spain), and the majority of its United States domiciled subsidiaries. The outlook for both ratings of MAPFRE PANAMA S.A. is stable.
The aforementioned rating actions were driven by both MAPFRE S.A.’s exposure to investments in several peripheral eurozone economies, in particular Spain and Portugal. The rating actions also reflected MAPFRE S.A.’s exposure to commercial property in Spain through its investment holdings. A.M. Best believes that these concerns regarding MAPFRE S.A. currently do not have a material effect on the ratings of its Panamanian subsidiary. Additionally, MAPFRE PANAMA S.A.’s balance sheet does not have any exposure to euruzone investments nor do the ratings reflect any direct enhancement from MAPFRE S.A.
While the ratings of MAPFRE PANAMA S.A. are unchanged and maintain a stable outlook, the possibility for negative rating actions could occur if there is additional negative rating action to its affiliated companies or a general worsening of its risk-adjusted capitalization or operating performance.
Although upward rating actions on MAPFRE PANAMA S.A. are unlikely at this point, potential positive rating triggers would include sustainable long-term improvements in the company’s operating performance in conjunction with continued capital and surplus growth.
The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “Natural Catastrophe Stress Test Methodology”; “Rating Members of Insurance Groups”; and “Assessing Country Risk.” Methodologies can be found at www.ambest.com/ratings/methodology.
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