AM Best Revises Outlooks to Positive for Universal Insurance Company; Affirms Credit Ratings of Universal Life Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlook to positive from stable and affirmed the Financial Strength (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of Universal Insurance Company (UIC). At the same time, AM Best has affirmed the FSR of B (Fair) and the Long-Term ICR of “bb+” (Fair) of Universal Life Insurance Company (ULICO). The outlook of ULICO’s Credit Ratings (ratings) is stable. Both companies are domiciled in Guaynabo, PR.

The ratings reflect UIC’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and marginal enterprise risk management (ERM).

The revision of the outlooks to positive from stable reflects the sustained improvement in UIC’s operating performance recently with return on revenue and surplus that has outperformed the industry composite averages. The profitable operating results are driven by the group’s solid underwriting performance, stemming from pure low loss ratios, which are partially offset by elevated underwriting expenses from a higher-than-average commission expense structure. UIC’s expense ratio performs in line with peers in Puerto Rico and is not considered an outlier.

The ratings of ULICO reflect its balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and marginal ERM. The outlooks on ULICO’s ratings remain stable, although AM Best is still concerned over the valuation and monetization of assets held in trust for ULICO’s benefit. The company’s business profile is limited with its concentrated business model of focused on providing annuities in the Puerto Rican market.

ULICO continues to take steps to reduce its overall counterparty risk and its legal actions to recapture the trust assets that are backing reserve credits related to Private Bankers Life & Annuity (PBLA). Exposure to the closed block of PBLA liabilities has decreased and ULICO recently monetized an $87 million trust asset. Significant assets as a percentage of its overall capital position still remains, and AM Best will continue to monitor such efforts as the company proceeds. The sizable outstanding trust assets and the execution risk associated with monetizing the remaining amount is the main driver of the marginal ERM assessment for both UIC and ULICO.

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 © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.