CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 16, 2013 12:00 AM (EDT)
A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength rating of C++ (Marginal) and issuer credit rating of “b” of Cooperativa de Seguros de Vida de Puerto Rico (COSVI) (San Juan, PR). The outlook assigned to both ratings is stable.
COSVI is a cooperative life insurance company owned by cooperative organizations in Puerto Rico. The rating actions reflect COSVI’s improvement in the quality of its statutory capital and surplus, its return to profitability in 2012, diversified product offerings and well-established presence in the cooperative and life insurance marketplace in Puerto Rico. In addition, the ratings acknowledge its members’ commitment to support the entity’s financial flexibility.
Partially offsetting these positive rating factors are COSVI’s low risk-adjusted capitalization, potential pay-down of its surplus notes, potential for further spread compression on its interest sensitive business lines and large exposure to office building real estate and mortgages relative to its capital and surplus funds.
Key rating factors that could result in positive rating actions include COSVI’s continued profitability, growth in its risk-adjusted and absolute capital, reduced volatility in operating results and reduced margin balances. Rating factors that could result in negative rating actions include deterioration of operating results, capital erosion and changes to the company’s investment strategy that result in an increase in margin investing or investment losses.
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.