MEXICO CITY--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of Chubb Perú S.A. Compañía de Seguros y Reaseguros (Chubb Perú) (Lima, Perú). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Chubb Perú’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Chubb Perú initiated operations in 1998 as Altas Cumbres; in 2007, it was acquired by ACE Group and named ACE Seguros S.A., until 2016, when ACE Limited acquired the Chubb Corporation and re-branded the company.
Chubb Perú has a diversified book of business, distributed through a mix of traditional and massive channels, such as large regional retailers and banks. Currently, 72% of its business portfolio is composed of property/casualty products, with accident and health making up 22% of the portfolio and life insurance the remaining 6%. As of September 2021, Chubb Perú is the ninth-largest insurance operation in Peru, with a market share of 2.2%.
AM Best considers Chubb Perú’s balance sheet strength to be very strong, as the company has a defined risk appetite that limits exposures and protects its solid capital base through adequate investment, reinsurance and underwriting principles. Additionally, the company has a comprehensive reinsurance program with its affiliate, Chubb Tempest Reinsurance Ltd. In 2020, the company’s risk adjusted capitalization remained stable due to adjustments in its business offerings, which in tandem with no dividend payments continued to support the company’s capital position.
The 2020 year-end results reflect the company’s efficiencies in acquisition costs that were able to mitigate the impact of COVID-19 in its credit life performance, resulting in a 27% increase in net income. Results through September 2021 remain positive, backed by alignments in strategy to limit exposure to complicated segments such as surety and credit life.
The company benefits from its integration into the Chubb group, gaining operational advantage through the same systems, procedures and ERM practices. The group has demonstrated its support to Chubb Perú by providing a comprehensive reinsurance program with its affiliate and actively overlooking its strategy. The stable outlooks reflect AM Best’s expectation that the company can continue to adjust its product offerings in a profitable manner, supported by its parent company.
Negative rating actions could occur if there is a sharp deterioration in operating performance or a significant weakening of its risk-adjusted capitalization. The ratings also could be downgraded if AM Best determines that Chubb Perú’s strategic importance to its group has diminished.
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