OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has downgraded the Financial Strength Rating (FSR) to B+ (Good) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to “bbb-” from “a-” of Triple-S Propiedad, Inc. (Triple-S Propiedad) (Guaynabo, Puerto Rico). These Credit Ratings (ratings) remain under review with negative implications. Additionally, A.M. Best has placed under review with negative implications the FSR of B++ (Good) and the Long-Term ICR of “bbb+” of Triple-S Salud, Inc. and Triple-S Vida, Inc. Also, A.M. Best has placed under review with negative implications the FSR of B++ (Good) and the Long-Term ICR of “bbb” of Triple-S Blue, Inc., I.I. Furthermore, A.M. Best has placed under review with negative implications the Long-Term ICR of “bb+” of Triple-S Management Corporation [NYSE: GTS]. Unless otherwise specified, all companies are domiciled in San Juan, Puerto Rico.
The rating downgrades reflect A.M. Best’s revised assessment of Triple-S Propiedad’s balance sheet strength, which A.M. Best categorizes as adequate, its adequate operating performance, limited business profile and marginal enterprise risk management (ERM). These rating actions follow the company’s recently announced 3rd quarter decline in policyholder surplus due to additional development on Hurricane Maria losses of approximately $52 million, in addition to the development of $76.4 million reported in the second quarter of 2018 (See press release dated August 3, 2018). As noted, A.M. Best has revised the assessment of Triple-S’s ERM, which A.M. Best categorizes as marginal. The assessment downgrade was driven by the size of the additional catastrophe losses relative to amounts previously disclosed to A.M. Best, which creates uncertainty regarding the company’s ERM program.
While the company has commenced and implemented a number of initiatives to improve capital, including acquiring retroactive reinsurance and support from the parent company, Triple-S Management Corporation, the ultimate effectiveness of these initiatives is uncertain. Additionally, while the rate of new claims associated with Hurricane Maria has slowed more recently, the potential for additional development remains an ongoing concern. Accordingly, the ratings will remain under review pending A.M. Best’s analysis of the company’s business plans.
The under review with negative implications status for Triple-S Management Corporation, Triple-S Salud, Triple-S Vida and Triple-S Blue reflects A.M. Best’s concerns that the impact of the issues at Triple-S Propiedad could have on the capitalization of the regulated entities and the liquidity at the holding company. The ratings will remain under review while A.M. Best conducts discussions with senior management as well as an update to the review of the proposed corrective action plan for Triple-S Propiedad.
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 Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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