OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of “bbb-” of Popular Life Re (PLRE) (Puerto Rico). PLRE is a life insurance subsidiary of its ultimate parent, Popular Inc., a publicly traded bank holding company based in Puerto Rico. The outlook for both ratings is positive.
The rating affirmations consider the continued improvement in Popular Inc.’s balance sheet condition through 2014, along with a trend of profitable operations and recent repayment of Troubled Asset Relief Program (TARP) funds. The ratings further reflect PLRE’s stable statutory income, history of capital generation from the insurance operations and modest premium growth. During the past year, PLRE has maintained favorable risk-based capital levels while demonstrating the ability to pay an extraordinary dividend to the parent. While premium volumes continue to show modest improvement, the company’s premium growth potential is strongly correlated to the Puerto Rican economy.
A.M. Best considers PLRE to be an important subsidiary of Popular Inc., which offers some risk diversification and builds upon the parent company’s existing insurance services business line. PLRE reinsures a portion of credit policies on consumer loans originated at Banco Popular de Puerto Rico, as well as personal accident and health policies underwritten by unaffiliated insurers.
Positive rating movement may occur if the financial performance of Popular Inc. continues to demonstrate improvement in the company’s financial profile on a post-TARP repayment basis, as well as improvement in the Puerto Rican economy. A downward rating action could result from deterioration in the operating performance, capitalization or balance sheet strength of Popular Life Re or a reversal in the recent positive trends of the parent company.
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:
- Evaluating Non-Insurance Ultimate Parents
- Risk Management and the Rating Process for Insurance Companies
- Rating Members of Insurance Groups
- Understanding BCAR for U.S. and Canadian Life/Health Insurers
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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