Market Overview

A.M. Best Affirms Credit Ratings of MAPFRE U.S.A. Corp.'s Main Insurance Subsidiaries

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A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Ratings of "a" of the main
property/casualty members of MAPFRE U.S.A. Group (MAPFRE U.S.A.).
The outlook of these Credit Ratings (ratings) is stable.

The aforementioned companies are owned by MAPFRE U.S.A. Corp. (MAPFRE
USA Corp), whose ultimate parent is Spain-based MAPFRE S.A.
(MAPFRE). The lead company in MAPFRE U.S.A. is The Commerce Insurance
Company
(Webster, MA) and includes inter-company pooling members, Citation
Insurance Company (MA)
(Webster, MA), Commerce West Insurance
Company
(San Ramon, CA), American Commerce Insurance Company (Columbus,
OH), MAPFRE Insurance Company of Florida (Miami, FL) and MAPFRE
Insurance Company
(Florham Park, NJ).

The ratings reflect MAPFRE U.S.A.'s balance sheet strength, which A.M.
Best categorizes as strong, as well as its marginal operating
performance, neutral business profile and appropriate enterprise risk
management (ERM). The ratings also reflect the implicit and explicit
support provided by its parent company, MAPFRE.

The strong balance sheet strength is derived from risk-adjusted
capitalization at the very strong level, which benefits from a high
credit quality investment portfolio and low reinsurance dependence,
partially offset by adverse loss reserve development trends and
liquidity and underwriting leverage measures, which compare unfavorably
with the averages for the private passenger standard automobile
composite. In addition, risk-adjusted capitalization levels have
declined over the recent five-year period due to sizeable dividend
payments to the intermediate and ultimate parent companies.

While MAPFRE U.S.A. has generated net income in most years in the recent
five-year period, its five-year average total return on revenue and
total return on equity measures lag the averages for the industry
composite by a significant margin. Operating results have been impacted
negatively by underwriting losses driven by adverse prior-year loss
reserve development and weather-related losses.

The business profile is considered neutral due to the group's local
market expertise, MAPFRE U.S.A./Commerce brand-name recognition in
several states, broad distribution networks and marketing activities
throughout the various subsidiaries. This is offset partially by MAPFRE
U.S.A.'s concentration of business in Massachusetts and to the
automobile lines of business. ERM is considered appropriate for the
group's size and complexity of its underwriting, investment and other
risks based on its ERM framework and controls.

The ratings also benefit from the group's role and strategic importance
as an attractive market to its parent company, MAPFRE. MAPFRE U.S.A. is
fully integrated into the operations and management of the group
globally and carries the MAPFRE name commercially. MAPFRE also provides
support to MAPFRE U.S.A. through reinsurance, staffing of senior
leadership positions and ERM guidance.

This press release relates to Credit Ratings that have been published
on A.M. 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 A.M. Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is the world's oldest and most authoritative insurance
rating and information source. For more information, visit
www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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