A.M. Best Affirms Ratings of Popular Life Re

OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb” of Popular Life Re (San Juan, Puerto Rico). The outlook for both ratings is stable.

Popular Life Re is a life reinsurance company that commenced operation in March 2004. The company is a subsidiary of Popular, Inc. (NASDAQ: BPOP), a bank holding company based in San Juan, Puerto Rico. Banco Popular de Puerto Rico, the largest commercial bank in Puerto Rico, also is a wholly owned affiliate of Popular, Inc. Other affiliated entities include Banco Popular North America, an operator of commercial banks in several states across the United States, Popular Financial Holdings, a consumer finance company and Evertec, a financial transaction processor and technology provider.

Popular Life Re reinsures a portion of credit policies on consumer loans originated by Banco Popular de Puerto Rico. The operations of Popular Life Re represent an extension of Popular, Inc.’s established insurance business, which operates under the brand Popular Insurance. While the credit insurance business is sourced to various Puerto Rico and U.S. financial institutions, thus far the reinsured policies have been underwritten by Caribbean American Life Assurance Company and Caribbean American Property Insurance Company.

Despite an uncertain local economy, A.M. Best believes Popular Life Re is reasonably positioned to expand its credit-related reinsurance business, given the relationship it has with the largest bank in Puerto Rico.

Offsetting rating factors include the modest overall operating profile, lack of growth in net premiums written and the risk concentration in a small geography. The modest capital investment on an absolute basis and the uncertainties about the successful execution of Popular Life Re’s business plan as a relative start-up also constrain the ratings.

For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.