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FOR IMMEDIATE RELEASE
OLDWICK - JULY 10, 2014 03:16 PM (EDT)
A.M. Best has upgraded the financial strength rating to B++ (Good) from B+ (Good) and the issuer credit rating to "bbb" from "bbb-" for Multinational Life Insurance Company (MLIC) (Hato Rey, Puerto Rico). The outlook for both ratings has been revised to stable from positive.
The rating upgrades reflect MLIC's financial and managerial support from MLIC's parent company, Multinational Insurance Company, a wholly owned subsidiary of Aseguradora Ancón, S.A., an insurer domiciled in Panama that is ultimately owned by Tobias Carrero Nacar.
MLIC markets a diversified product portfolio primarily through personal producing agents, general agents, brokers and direct marketing. A general portfolio of ordinary life, group life, credit life and accident and health insurance products are marketed and sold predominantly in Puerto Rico. MLIC's health business is concentrated in cancer, disability income and accident policies.
A capital infusion from MLIC's owners in the form of preferred stock in 2011, coupled with positive operating results over the past two years, enabled its capitalization to increase to more acceptable levels. A number of management initiatives have been put into place, including meaningful cost savings, which have contributed to the company's return to profitability. A.M. Best believes MLIC will continue to generate positive operating earnings, which are expected to be retained.
Partially offsetting these strengths include a history of unprofitable results, declining premium trends and challenges associated with rebuilding a brand and generating sustained profitable premium growth in MLIC's core markets.
Key rating factors that could result in positive rating actions include continued growth in MLIC's risk-adjusted capitalization, maintenance of favorable operating results and the continued support of the owners. Factors that could result in negative rating actions include a decrease in risk-adjusted capitalization or total capital, operating losses and reduced support from the owners.
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 .
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.