Market Overview

A.M. Best Affirms Credit Ratings of Maxseguros EPM Ltd.


A.M. Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of "a-" of Maxseguros
EPM Ltd. (Maxseguros) (Bermuda). The outlook of these Credit Ratings
(ratings) is stable.

The ratings reflect Maxseguros' balance sheet strength, which A.M. Best
categorizes as strongest, as well as its adequate operating performance,
neutral business profile and appropriate enterprise risk management.

The ratings also reflect Maxseguros' strong risk-adjusted
capitalization, supported by a comprehensive and adequate reinsurance
program coupled with conservative balance sheet strategies, as
conservative investment policy and limited premium risk exposure.
Additionally, the ratings recognize the support of its parent, Empresas
Publicas de Medellin E.S.P. (EPM), owned by the Colombian municipality
of Medellin. EPM is the largest power generation and multi-utility
company in Colombia. Maxseguros is a single-parent captive insurer
wholly owned by EPM, which provides reinsurance to the EPM group,
covering property damage and business interruption, commercial crime,
directors and officers and construction liability exposures.

These positive rating factors are offset partially by Maxseguros'
limited business and market scope, which is somewhat mitigated by the
company's stable results, favorable geographic spread of risk and the
history of Maxseguros' growing surplus position, as well as the support
of its ultimate parent, EPM. Additionally, while Maxseguros depends on
reinsurance, EPM's senior management is involved intimately in the
captive's operations.

The stable outlooks are derived from Maxseguros' ability to sustain a
strong level of operating performance due to its demonstrated risk
management expertise and conservative underwriting criteria. This held
true in 2016 and 2017, when the company presented net claims while
producing constant positive bottom line results. A.M. Best has a
favorable view of Maxseguros' overall profile within the ultimate
parent's structure and recognizes the benefits inured from this.
Particular attention is paid to EPM senior management's active

Positive rating triggers could include sustained positive operating
results and improved risk-adjusted capitalization. Negative rating
impact could occur if underwriting performance declines or demonstrates
volatility that negatively impacts earnings and capitalization over
time. Negative rating impact also could occur if there is a material
shift in risk profile that potentially could undermine the stability and
profitability of the company, or if financial issues arise and place
pressure on the ratings or the parent's credit profile.

A.M. Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated throughout the
world. For current Best's Credit Ratings and independent data on the
captive and alternative risk transfer insurance market, please visit

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
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
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