OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlook to stable from positive for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb” of Multinational Life Insurance Company (Multinational Life) (Puerto Rico). The outlook of the FSR remains stable.
The revised outlook for the Long-Term ICR reflects the uncertainty of the economy in Puerto Rico, which is the sole location in which the company operates. The stable outlook also reflects Multinational Life’s adequate risk-adjusted capitalization.
Multinational Life remains strongly capitalized in support of its insurance and investment risks. However, as a consequence of the recent storms that devastated Puerto Rico and the Caribbean, there continues to be business interruption that has affected operating performance during fourth-quarter 2017, and also may have negative implications in 2018. The severity of the financial impact to operating results from the storms may be somewhat contained as Multinational Life is protected by well-fortified reinsurance covenants.
Positive movement in Multinational Life’s ratings or outlooks could take place if the company’s business profile improves due to recovery of the Puerto Rico economy, while continuing to be supported by stable levels of risk-adjusted capitalization and the commitment of support from its parent, Aseguradora Ancón, S.A., and the organization’s Board of Directors. Negative rating actions could occur if there is further deterioration of the Puerto Rico economy, leading to high surrenders or mandatory reserve increases.
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