AM Best Affirms Credit Ratings of Seguros El Roble, S.A.

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 Seguros El Roble, S.A. (El Roble) (Guatemala). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect El Roble’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The stable outlooks reflect AM Best’s expectation that the company will continue to perform in a profitable manner while it continues to strengthen its capital base. In addition, the outlooks recognize El Roble’s strategy to prioritize profitability over market share in a competitive marketplace.

El Roble, which was established in 1972, is the largest insurer in Guatemala, with a market share of 23.6%. Its portfolio is composed mainly of non-life products (85%), as of December 2021, with the remainder (15%) tailored for the life insurance market. On a net basis, the accidents and health line of business represents 47% of the company’s premium portfolio, with 30% in property/casualty lines and the remaining 23% in life insurance business. Bicapital Corporation, a Panama-based private financial group that has financial services operations, including banking, insurance and asset management, in Guatemala, Honduras, El Salvador, Bahamas, Panama and the United States, owns El Roble. El Roble ranks No. 1 in accidents and health and auto in Guatemala.

AM Best views the company’s business profile as neutral, based on El Roble’s market leadership and its capacity to adjust the terms of its offerings through 2021, while aiming at higher diversification in lines and distribution channels in 2022. In addition, the El Roble’s market-leading position has allowed it to outperform market growth rates continuously for the past 10 years while sustaining diversification in products and distribution channels.

AM Best’s stable market segment outlook on Guatemala’s insurance industry recognizes the macroeconomic fundamentals of the country, which helped limit the negative impact of the economic downturn on premium growth, claims and investments.

El Roble’s balance sheet strength is assessed at the strongest level, as the availability and quality of its capital are well-positioned for the company’s risk profile. During 2021, risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remained stable as the company continued to post positive net results and making dividend payments. Historically, the reinsurance program and ERM capabilities of El Roble have been effective in protecting its balance sheet.

The operating performance of the company is assessed as strong due to its capacity to maintain constant growth in its net income backed up by solid underwriting. Strategic adjustments have allowed El Roble to navigate different cycles of the market. AM Best acknowledges that 2022 could be challenging, due to the normalization of claims frequency and the competitive marketplace.

Negative rating actions could take place if the company’s operating performance renders negative results, either from deterioration in underwriting quality or market conditions. Negative rating actions also could take place if AM Best’s assessment of balance sheet strength is impacted unfavorably by macroeconomic conditions that affect the company, its parent or Guatemala.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.