AM Best Affirms credit ratings of Popular Life Re as good
SAN JUAN – Insurance industry rating company AM Best has affirmed its Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Popular Life Re (PLRE) (Puerto Rico). The outlook of these credit ratings is stable.
PLRE is a life insurance subsidiary of Popular Inc., a publicly traded bank holding company based in Puerto Rico. The company also reinsures a portion of credit insurance policies on consumer loans originated at Banco Popular de Puerto Rico, as well as personal accident and health policies underwritten by unaffiliated insurers.
“The ratings reflect PLRE’s balance sheet strength,” which AM Best categorizes as “very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management,” its release reads.
The ratings also reflect PLRE’s “stable liability profile, strong return metrics and invested assets, which are of excellent credit quality and highly liquid. PLRE is projecting positive operating performance growth over the next several years. PLRE remains strategically important to Popular, Inc., although the earnings contribution to the parent company is modest,” according to AM Best.
“Partially mitigating rating factors include declining premium growth and geographic and product concentration risk, as credit life and accident and health business mostly is transacted in Puerto Rico, and challenges associated with difficulties structurally and economically following the natural disasters,” Best said, adding, “Lastly, PLRE’s ratings reflect ratings drag from the parent company, Popular, Inc.”