Press Release - JUNE 07, 2019

AM Best Removes From Under Review, Affirms Credit Ratings of ASSA Compania de Seguros S.A.; Affirms Credit Ratings of Affiliates

 Elí Sánchez
Associate Director
+52 55 1102 2720, ext. 122

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of ASSA Compañía de Seguros S.A. (ASSA) (Panama City, Panama). The outlook assigned to these Credit Ratings (ratings) is stable. AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICRs of “a-” of Lion Reinsurance Company Limited (Lion Re) (Bermuda) and Reaseguradora America SPC Ltd. (RAM Re) (Cayman Islands). The outlook of these ratings remains stable. All companies are subsidiaries of ASSA Compañía Tenedora S.A. (ASSA Tenedora) and are owned ultimately by Grupo ASSA, S.A. (Grupo ASSA), a financial services holding company publicly traded on the Panama Stock Exchange.

The ratings of ASSA reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The ratings of Lion Re reflect its balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

The ratings of RAM Re reflect its balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, neutral business profile and appropriate ERM.

ASSA’s ratings were placed under review with negative implications following the Aug. 7, 2017, announcement that ASSA had entered into an asset purchase agreement to fully acquire Assicurazioni Generali

S.p.A. (Generali) insurance operations in Panama. At that time, there were concerns about the financing structure of the acquisition, and its effect on the ASSA’s risk-adjusted capitalization and the financial leverage that could arise from the operation.

On April 12, 2018, the implications of the under review status were revised to developing, after the transaction’s financial structure was defined and its potential impact on risk-adjusted capitalization was revised, rendering results in terms of balance sheet strength, business profile and operating performance that were appropriate for the current rating. However, implementation risk and financial leverage at the company remained ongoing concerns at that time.

The under review status has been removed and ratings have been affirmed, as the company was able to meet its growth target, while maintaining underwriting quality, profitability and good capital management that allowed risk-adjusted capitalization to remain at supportive levels for the ratings. Additionally, the company has been able to maintain an adequate financial leverage by repaying most of the financing used in the transaction.

The stable outlooks reflect the stability of the capital, even with the intangibles created after acquiring Generali’s business. The outlooks also reflect AM Best’s expectation of the continued performance of the company, in terms of underwriting, profitability, capital management and importance within Panama’s insurance market.

Positive rating actions could take place if the company is able to continue to grow its capital base, while at the same time maintaining its operating performance. Additionally, the quality of assets remains a key component of AM Best’s evaluation, as any deterioration could impact the company’s risk-adjusted capitalization.

Negative rating actions could occur if the company is not able to support its risks through its level of capital, especially given the high intangibles present because of the transaction with Generali. If asset quality deteriorates without any additional capital, risk-adjusted capitalization could become affected, which would then potentially affect the ratings of the company.

Lion Re has continued to post adequate operating performance from its affiliated insurance companies in the region and from new strategic business alliances, while maintaining very strong risk-adjusted capitalization. The company continues to support ASSA Tenedora’s strategy while producing positive bottom-line results amid healthy prospects for growth. AM Best expects Lion Re to continue playing an important role in ASSA Tenedora’s strategy, as it consolidates operations in new regions by providing reinsurance capacity while maintaining its good capital position.

Factors that could lead to an upgrade of the ratings or positive outlooks for Lion Re include consistently positive bottom-line results that can contribute to further strengthening of its risk-adjusted capitalization over the next few years. Factors that could lead to negative rating action include a material loss of capital from either claims or investments, leading to a reduced level of capital that does not support its ratings. RAM Re is registered as a segregated portfolio company, licensed as a Class B(i) insurer under the Cayman Islands’ insurance law. RAM Re’s ratings are based on the steady performance of its operations and the nature of the portfolios it manages. During 2018 and 2019 there were important developments on its portfolios that could affect its operation as a whole. While measures have been taken to offset these developments, such efforts have not yet materialized. AM Best expects the company to be ready to undertake those measures. Capitalization currently is adequate for RAM Re’s current ratings; however, revenue-generating capabilities could become affected, and in tandem, the ability to generate capital. If the business volume continues to grow, or as new portfolios are integrated, Ram Re’s ratings could become pressured at the resulting capital levels. RAM Re has explicit support from its parent company through a commitment letter provided by Grupo ASSA, enhancing AM Best’s view of its financial strength.

AM Best considers the ratings to be appropriate for the current rating levels. Factors that could lead to negative rating action include a more limited business profile, lower risk-adjusted capitalization and consistent underwriting losses.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at

Key insurance criteria reports utilized:

  • Alternative Risk Transfer (ART) (Version Oct. 13, 2017) — Lion Re and RAM Re

  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Universal BCAR (Version May 23, 2019)

  • Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017) — ASSA and Lion Re

  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Understanding Best’s Credit Ratings.

  • Previous Rating Date: April 12, 2018

  • Date Range of Financial Data Used: ASSA: Dec. 31, 2014-April 30, 2019; Lion Re and RAM Re: Dec. 31, 2014–Dec. 31, 2018

This press release relates to rating(s) that have been published on AM Best’s website. For additional 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.

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While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

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