AM Best

AM Best Affirms Credit Ratings of Reaseguradora Patria, S.A.


Inger Rodriguez
Associate Financial Analyst
+52 55 1102 2720, ext. 108

Anthony Diodato
Managing Director
+1 908 439 2200, ext. 5704
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Al Slavin
Communications Specialist
+1 908 439 2200, ext. 5098


MEXICO CITY - NOVEMBER 21, 2022 11:14 AM (EST)
AM Best has affirmed the Financial Strength Rating of A (Excellent), the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” (Excellent) and the Mexico National Scale Rating of “aaa.MX” (Exceptional) of Reaseguradora Patria, S.A. (Patria Re) (Mexico). AM Best also has affirmed the Long-Term ICR of “bbb” (Good) of Patria Re’s ultimate parent, Peña Verde, S.A.B. (Peña Verde) (Mexico). The outlook of these Credit Ratings (ratings) is stable. Per AM Best’s criteria procedure on insurance holding companies, Peña Verde’s rating reflects a standard notching from Patria Re’s Long-Term ICR.

The ratings reflect Patria Re’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The stable outlooks on Patria Re’s ratings reflect Patria’s ability to maintain stable profitability metrics and the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), while implementing its business expansion strategy amid challenging years faced by Latin America’s insurance markets.

Patria Re’s strongest balance sheet assessment is supported by the same assessment on its risk-adjusted capitalization, as measured by BCAR, low underwriting leverage, robust reinsurance program and the company’s strong liquidity metrics. The ratings also reflect its comprehensive ERM infrastructure and expansive knowledge of its core markets in Latin America, which reflects the company’s smooth implementation of its expansion strategy with a stable overseas operation outside its niche market.

Partially offsetting these strengths is Patria Re’s operating performance, impacted by the volatile valuation of investments in recent years, due to economic volatility in Mexico and most recently due to the COVID-19 pandemic, despite improvements in underwriting quality. The company has taken steps to alleviate concern related to the significant participation of equities in its investment portfolio and some catastrophe-prone lines of business, which could create volatility in the company’s operating performance, by shifting toward a more conservative investment strategy.

Patria Re has established a solid niche position in Mexico and in other Latin America markets, which allows it to accept profitable business selectively while maintaining a diversified product portfolio tailored to specific markets. This strategy has resulted in consistently favorable underwriting results over the years and has contributed to Patria Re’s enhanced risk-adjusted capitalization. A well-balanced reinsurance program placed among counterparties with a strong security level also reinforces the company’s risk-adjusted capitalization. Furthermore, the company’s underwriting leverage has remained at a conservative level for the past five years.

During 2021, the company reported positive bottom-line results, despite limitations posted by catastrophe reserve development, mainly driven by underwriting results. The company’s efforts to maintain stable claims and management expenses, coupled with strong underwriting practices, have resulted in a profitable first seven months for 2022; however, it remains limited by catastrophe reserve development.

AM Best considers Patria Re to be well-positioned at its current rating level. Factors that could lead to positive rating actions include a consistent improvement in profitability metrics underpinned by positive underwriting and bottom-line results, while maintaining its strongest level of risk-adjusted capitalization, as well as the continued and successful operation of its overseas expansion. Factors that may lead to negative rating actions include a sustained decline in profitability, significant deterioration in risk-adjusted capitalization and unsuccessful operations of the company’s overseas expansion plans.

The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Nov. 13, 2020), 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:

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

  • Understanding Global BCAR (Version June 30, 2022)

  • Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017)

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

  • AM Best’s Ratings on a National Scale (Version Oct. 13, 2017)

  • Scoring and Assessing Innovation (Version March 5, 2020)

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 Guide to Best’s Credit Ratings.

  • Previous Rating Date: Nov. 30, 2021

  • Date Range of Financial Data Used: Dec. 31, 2017-July 31, 2022

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.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

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.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM 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. AM 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.

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

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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AMB# Company Name
033224 Peña Verde, S.A.B.
086054 Reaseguradora Patria, S.A.