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A.M. Best Affirms Credit Ratings of Seguros Suramericana S.A.

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A.M. Best has affirmed the Financial Strength Rating of A-
(Excellent) and a Long-Term Issuer Credit Rating of "a-" of Seguros
Suramericana S.A.
(Sura) (Panama). The outlook of these Credit
Ratings (ratings) is stable.

The ratings reflect Sura's balance sheet strength, which A.M. Best
categorizes as very strong, as well as its strong operating performance,
neutral business profile and appropriate enterprise risk management.

Sura's balance sheet strength is underpinned by its risk-adjusted
capitalization being at the strongest level, as measured by Best's
Capital Adequacy Ratio (BCAR), supported by a well-structured
reinsurance program, synergies provided by Grupo de Inversiones
Suramericana S.A.
(Grupo Sura), and improved underwriting
performance partially driven by its previous integration with Seguros
Banistmo, S.A.
(Seguros Banistmo) in 2015. Offsetting these positive
rating factors is Panama's highly competitive landscape, which could
pressure Sura's operating performance.

As of year-end 2017, the company remains the fourth-largest insurer in
Panama, with a market share of 9.7%. Sixty-four percent of its business
portfolio is composed of property/casualty (P/C) products, with life
products making up the remaining 36%. Sura's main P/C business segment
is auto, which represents 34% of its gross written premiums. The
acquisition of Seguros Banistmo was led in 2015 by Grupo Sura, a leading
Colombian financial services company in the Latin American insurance,
asset management and banking industries. No integration risks have
emerged from the transaction.

Sura´s capitalization, driven by its value-based management model, is
reinforced consistently through profitability and a prudent dividend
policy, enabling the company to maintain current capital adequacy levels
while meeting the group's post-merger return on investment goals.
Additionally, the company's balance sheet strength is supported by a
comprehensive reinsurance program set with reinsurers that have
excellent security and the implementation of an internal economic
capital model.

Sound underwriting practices, coupled with merger synergies that have
minimized administrative costs, have driven Sura´s strong operating
performance as reflected in profitability metrics characterized by a
positive trend; at year-end 2017, the company managed to generate a
combined ratio of 79%. In addition, the business profile benefited from
the merger in terms of added diversification and synergies, such as the
bancassurance distribution channel.

Positive changes in the ratings or outlooks could occur if the company
continues to maintain its post-merger performance and profitability,
leading to higher levels of risk-adjusted capitalization. Negative
rating actions could result if the expected operating performance
deviates considerably and weakens due to Panama's highly competitive
environment, affecting the company's risk-adjusted capitalization or
business profile.

The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
  • Catastrophe Analysis in A.M. Best Ratings (Version Oct. 13, 2017)
  • Evaluating Country Risk (Version Oct. 13, 2017)
  • Understanding Universal BCAR (Version May 14, 2018)

View a general description of the policies
and procedures
used to determine credit ratings. For information on
the meaning of ratings, structure, voting and the committee process for
determining the ratings and monitoring activities, please refer to Understanding
Best's Credit Ratings
.

  • Previous Rating Date: Sept. 14, 2017
  • Date of Financial Data Used: June 30, 2018

This press release relates to rating(s) that have been published on
A.M. Best's website. For additional 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.

A.M. Best does not validate or certify the information provided by
the client in order to issue a credit rating.

While the information obtained from the material source(s) is
believed to be reliable, its accuracy is not guaranteed. A.M. Best does
not audit the company's financial records or statements, or otherwise
independently verify the accuracy and reliability of the information;
therefore, A.M. Best cannot attest as to the accuracy of the information
provided.

A.M. Best's credit ratings are independent and objective opinions,
not statements of fact. A.M. Best is not an Investment Advisor, does not
offer investment advice of any kind, nor does the company or its Ratings
Analysts offer any form of structuring or financial advice. A.M. Best's
credit opinions are not recommendations to buy, sell or hold securities,
or to make any other investment decisions. View our
entire
notice
for complete details.

A.M. Best receives compensation for interactive rating services
provided to organizations that it rates. A.M. Best may also receive
compensation from rated entities for non-rating related services or
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advisory services. For more information regarding A.M. Best's rating
process, including handling of confidential (non-public) information,
independence, and avoidance of conflicts of interest, please read the
A.M.
Best Code of Conduct
. 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 a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information.

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

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