AM Best has upgraded the Financial Strength Rating (FSR) to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb” (Good) from “bbb-” (Good) of Triple-S Propiedad, Inc. (TSP) (Guaynabo, PR). The outlook of the FSR has been revised to stable from positive, while the outlook of the Long-Term ICR is positive.
The Credit Ratings (ratings) reflect TSP’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management (ERM).
The rating upgrades reflect the revision of TSP’s balance sheet strength assessment to very strong from strong, primarily driven by an improvement in its risk-adjusted capitalization in recent years. TSP has reported policyholder surplus growth due to favorable operating results, and capital contributions from its parent. The capital contributions were in response to significant operating losses in 2018. A portion of these contributions were in the form of a surplus note, which was converted to permanent capital in November 2022. TSP has reported historically favorable operating results that outperform its industry composite. However, the five-year average measures have been impacted by catastrophe losses in 2018 and an elevated expense ratio due to its higher commission structure.
The positive Long-Term ICR outlook is based on TSP’s continued improvement of its ERM program with reduced loss tolerance levels and increased reinsurance protection, as well as more frequent stress testing. The current marginal ERM assessment is based on demonstrated weakness relative to reinsurance purchasing decisions in prior years.
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.
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