Market Overview

A.M. Best Revises Outlooks to Positive for Chubb Seguros Panamá S.A.


A.M. Best has revised the outlooks to positive from stable and
affirmed the Financial Strength Rating of A (Excellent) and the
Long-Term Issuer Credit Rating of "a+" of Chubb Seguros Panamá S.A. (Chubb
Panamá) (Panamá).

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

The revised outlooks to positive reflect Chubb Panamá´s sound
underwriting practices, which supports its consistent operating
performance. The company´s balance sheet strength continues to be
supported by risk-adjusted capitalization at the strongest level, as
measured by Best's Capital Adequacy Ratio (BCAR) and a solid reinsurance
program placed with Chubb Tempest Reinsurance Ltd., as well as the
company's affiliation to its ultimate parent, Chubb Limited, one
of the world's largest insurance groups, and its diversified business
profile. The affiliation provides Chubb Panamá synergies and operating
efficiencies. Offsetting these positive rating factors are Chubb
Panamá's modest, but growing market share within Panamá's insurance
industry relative to the lines of business it writes, and the strong
competitive environment in Panamá's insurance sector; however, the
company partially mitigates this through a diversified business
portfolio spread across other geographies.

Chubb Panamá initiated operations in 2008 as ACE Seguros S.A., and
continued with that brand name until 2016 when its name was changed to
Chubb Seguros Panamá S.A. The company writes mainly non-life and
reinsurance business, covering exposures throughout Latin America. In
2017, fire insurance was the company's top performing business line and
currently represents 36% of gross written premiums. The company's main
distribution channels are positioned with brokers. Chubb Panamá has
shown disciplined underwriting in a highly competitive market,
consistently reporting overall premium sufficiency levels that compare
positively with its competitors. In 2017, Chubb Panamá achieved a
combined ratio of approximately 56%.

Chubb Panamá's risk-based capitalization remains fully supportive of its
current ratings, as measured by BCAR. The Panamá subsidiary is mainly
susceptible to underwriting risk given growth in premiums; however, the
company's strong underwriting results maintain sound overall
profitability metrics, reflected in a return on equity of 27.8% in 2017.
Moreover, the company benefits from being integrated into the group,
gaining operational leverage through the same systems, procedures and
ERM practices. The group historically has demonstrated its support to
Chubb Panamá through capital injections to fund growth opportunities.

Key factors that could lead to positive rating actions for Chubb Panamá
include continued favorable trends in profitability and capital growth
supported by good underwriting practices. Conversely, a sharp
deterioration in operating performance or a significant weakening of its
risk-adjusted capitalization could lead to negative rating actions.
Additionally, if A.M. Best determines that Chubb Panamá ´s strategic
importance to its group diminishes, the ratings also could be downgraded.

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

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