AM Best


NOVEMBER 18, 2022 11:55 AM (EST)

AM Best Upgrades Credit Ratings of Chubb Seguros Panama S.A.


CONTACTS:
 Ricardo Rodríguez Pérez
Financial Analyst
+52 55 1102 2720, ext. 139
ricardo.rodriguez@ambest.com

Eli Sanchez
Associate Director, Analytics
+52 55 1102 2720, ext. 108
eli.sanchez@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Al Slavin
Communications Specialist
+1 908 439 2200, ext. 5098
al.slavin@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - NOVEMBER 18, 2022 11:55 AM (EST)
AM Best has upgraded the Financial Strength Rating to A++ (Superior) from A+ (Superior) and the Long-Term Issuer Credit Rating to “aa+” (Superior) from “aa-” (Superior) of Chubb Seguros Panama S.A. (Chubb Panama) (Panama City, Panama). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Chubb Panama’s strategic importance as a subsidiary of the Chubb U.S. Group of Insurance Companies (Chubb U.S Group), which on a consolidated basis has a balance sheet strength that AM Best assesses at the strongest level, as well as its very strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The upgrade of Chubb Panama’s ratings reflects the company’s integration and support from its group through its holding company, Chubb U.S Group, which provides synergies and operating efficiencies to the Panama subsidiary.

The stable outlooks reflect AM Best’s expectation that Chubb U.S Group will maintain its strongest balance sheet strength assessment, supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), while continuing to demonstrate very strong operating results driven by the group’s consistently solid underwriting performance. The stable outlooks further reflect AM Best’s expectation that the ultimate parent, Chubb Limited, will continue to have a neutral impact on the ratings of the group’s members.

The ratings reflect Chubb Panama’s sound underwriting practices, which support its consistent operating performance, diversified business portfolio and solid reinsurance program placed with Chubb Tempest Reinsurance Ltd., as well as the company’s affiliation to its ultimate parent, Chubb Limited, one of the world’s largest insurance groups. This affiliation provides Chubb Panama with synergies and operating efficiencies. Offsetting these positive rating factors are Chubb Panama’s modest but growing market share within Panama’s insurance industry relative to the lines of business it writes, and the strong competitive environment in Panama’s insurance sector. However, the company partially mitigates this competitive aspect through its diversified business portfolio that is spread across other markets in Central America.

Chubb Panama initiated operations in 2008 as ACE Seguros S.A., and continued with that brand name until 2016 when its name was changed to Chubb Seguros Panama S.A. The company writes mainly non-life and reinsurance business, covering exposures throughout Panama and Central America. In 2021, property stood as the company’s main business line, generating 28.8% of its net written premium. Chubb Panama’s main distribution channels are positioned with brokers and cedent companies. Chubb Panama has shown disciplined underwriting in a highly competitive market, consistently reporting overall premium sufficiency levels that compare positively with its competitors. In 2021, Chubb Panama achieved a combined ratio of approximately 92%, up from 78.7% in 2020, and driven by the increase in claims in its fire and transport business lines, as well as an increase in its administrative expenses.

The Panama subsidiary’s strong underwriting results have sustained sound overall profitability, as reflected in a return-on-equity ratio of 5.0%, and contributed to expanding the company’s capital base at a 10.2% compound annual growth rate in 2021. AM Best expects Chubb Panama’s risk-based capitalization to remain supported by the group´s conservative capital management guidelines.

Moreover, the company benefits from being integrated into the group, gaining operational leverage through the same systems, procedures and ERM practices. The group historically has demonstrated its support to Chubb Panama through capital injections to fund growth opportunities. A change in AM Best’s perception regarding the strategic importance of Chubb Panama to the group could impact Chubb Panama’s ratings.

The ratings could be negatively affected by the following factors: deterioration in the group’s risk-adjusted capitalization to a level that no longer supports the current ratings; sustained deterioration in underwriting or operating performance; a material weakening of Chubb Ltd.’s overall credit profile.

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 www.ambest.com/ratings/methodology .

Key insurance criteria reports utilized:


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

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

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

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

  • Understanding Global BCAR (Version June 30, 2022)

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: Oct. 8, 2021

  • Date Range of Financial Data Used: Dec 31, 2017-Dec 31, 2021

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.

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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
090179 Chubb Seguros Panama S.A.