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Best’s News & Research Service - January 13, 2016 11:57 AM (EST)

A.M. Best Affirms Ratings of Mapfre Panamá S.A.

  • January 13, 2016 11:57 AM (EST)
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Mexico City //BestWire// - A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Mapfre Panamá S.A. (Mapfre Panamá) (Panama City, Panama). The outlook for both ratings is stable.

The ratings of Mapfre Panamá reflect its excellent risk-adjusted capitalization and its geographic importance to MAPFRE S.A. (Mapfre Group) in the Central American market, as well as the incorporation of the Mapfre Group’s practices and procedures into Mapfre Panamá. The company has been able to maintain its good operating performance and to improve its underwriting results by reacting properly to business opportunities and appropriately making improvements to its products. Offsetting these positive rating factors is the recent highly competitive environment for its core businesses.

Mapfre Panamá is the third-largest insurer in Panama, the market leader in the individual life and auto segments and the third most important participant in health, transportation and surety. Year-end 2014 results improved mainly due to less claims from the life segment, although the results were somewhat constrained due to low yields from its investment portfolio, as the company’s investment strategy is conservative. Improvement in underwriting performance in 2015 derives from adjustments in its underwriting practices, mainly in the life segment. The company also took advantage of important new businesses opportunities that as of June 2015 have allowed it to maintain adequate premium sufficiency. Additionally, Mapfre Panamá’s solid capital base and good reserve position provide a solid base for financial flexibility and excellent risk-adjusted capitalization levels. Enterprise risk management practices and procedures from Mapfre Group are implemented and will continue to positively affect the future performance of the company.

The strong competitive environment in Panama’s insurance market, especially in segments where Mapfre Panamá has leading positions, continues to generate soft market conditions and increased risk appetites across the industry, presenting challenges in the operating performance of the company in specific segments such as health and auto.

A.M. Best considers Mapfre Panamá to be well-positioned at its current rating level. Positive rating actions could occur if the company is able to continue improving its underwriting performance despite the challenging market conditions, post adequate financial yields despite the conservativeness of its investment portfolio and increase its capital base driven by the afore mentioned improvements. Additionally, positive rating actions at its ultimate parent could lead to improvements in Mapfre Panamá ratings.

Negative rating actions could derive from significant reductions in its capital due to constant deterioration of its underwriting performance, unexpected losses that deteriorate its risk-adjusted capitalization to levels non-supportive of its current ratings, or if the company deviates significantly from the practices and benefits assumed from its association with Mapfre Group. Additionally, negative rating actions at its ultimate parent could lead to a downgrade of Mapfre Panamá ratings.

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

Key insurance criteria reports utilized:


  • Catastrophe Analysis in A.M. Best Ratings

  • Evaluating Country Risk

  • Insurance Holding Company and Debt Ratings

  • Rating Members of Insurance Groups

  • Risk Management and the Rating Process for Insurance Companies

  • Understanding Universal BCAR

View a general description of the policies and procedures used to determine credit ratings. Also in accordance with Mexican regulations, the following is a link to required disclosures – A.M. Best America Latina Supplementary Disclosure.


  • Previous Rating Date: Oct. 31, 2014.

  • Date of Financial Data Used: June 30, 2015.

This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best’s credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.



Panama Property And Liability Insurers Latin America Press Release Insurance Central America Best's Credit Rating Action


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