LONDON--(BUSINESS WIRE)--A.M. Best has revised the outlook to stable from negative and affirmed the financial strength rating of A (Excellent) and issuer credit rating of “a+” of Ocaso, S.A. Seguros y Reaseguros (Ocaso) (Spain).
The ratings reflect Ocaso’s excellent risk-adjusted capitalisation and long record of strong financial performance. The revised outlook reflects the stabilising economic conditions within Spain, to which Ocaso has material investment and underwriting exposure.
Ocaso’s operating performance has been resilient in recent years, despite the prevailing weak economic conditions in Spain. Ocaso has a strong domestic brand and a stable insurance portfolio. Prospectively, the company is expected to continue to produce strong earnings supported by robust underwriting performance. Ocaso has an excellent level of risk-adjusted capitalisation, which has been strengthened in recent years via the retention of profits.
Ocaso remains heavily exposed to Spanish sovereign debt via its investment portfolio. While economic headwinds such as high unemployment and a continued soft housing market persist, Spain is showing early signs of economic recovery. In addition, while Spain’s government debt remains elevated, Spanish—and more generally, European—financial markets have stabilised over the past year, easing the debt burden.
Negative rating pressure could occur if there is significant erosion of Ocaso’s risk-adjusted capitalisation or further deterioration in the Spanish economy. Upwards rating movement is unlikely at present.
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.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
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