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BEST'S CREDIT RATING ACTION

Best’s News & Research Service - August 29, 2024 12:55 PM (EDT)

AM Best Downgrades Credit Ratings of Seguros Suramericana S.A.

  • August 29, 2024 12:55 PM (EDT)
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//BestWire// - AM Best has downgraded the Financial Strength Rating to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Rating to “a-” (Excellent) from “a” (Excellent) of Seguros Suramericana S.A. (Sura) (Panama). The outlook of these Credit Ratings (ratings) has been revised to stable from negative.

The ratings reflect Sura’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 rating downgrades took place as a result in the shift in underwriting performance trends of the company, reflecting a challenge to Sura’s profitability generation capabilities and rendering metrics to levels no longer in line with the strong operating performance assessment.

 Balance sheet strength is supported by a well-structured reinsurance program and synergies provided by Grupo de Inversiones Suramericana S.A. (Grupo Sura), a leading Colombia-based financial services company in Latin America’s insurance, asset management and banking industries. Offsetting these positive rating factors are Panama’s highly competitive landscape, and its historically high dividend payout ratios.

As of June 2024, Sura was the fifth-largest insurer in Panama, with a market share of 8%; 67% of its business portfolio is composed of non-life products, with life products making up the remaining 33%. Sura’s main property/casualty business segment is auto, which represents 36% of its gross written premium.

Grupo Sura’s initiative in 2018 to optimize shareholder value through the merger of intermediate insurance holding companies, Suramericana S.A. and Inversura Panamá Internacional S.A., drove a stock split transaction for its subsidiary, Aseguradora Suiza Salvadoreña, S.A. This further enhanced Sura’s risk-adjusted capitalization, which was already at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Sura’s capital base continues to be driven by its value-based management model, while meeting the group’s post-merger return on investment goals. AM Best expects Sura to follow consistent capital management guidelines supportive of its ratings. Additionally, the company’s balance sheet strength is supported by a comprehensive reinsurance program, set with reinsurers that have excellent security, as well as the implementation of an internal economic capital model.

During 2023, most of Sura’s largest business lines presented a recovery in growth, after contracting during the previous period. Despite efforts to maintain all lines of business under premium sufficiency, the results reflect an opportunity for underwriting improvements, and puts pressure on the company’s profitability. As of June 2024, Sura’s operating performance metrics remain consistent with the adequate assessment, contributing to a net profit of USD 606,554.

Negative rating actions could occur if the company's risk-adjusted capitalization deteriorates to a level no longer supportive of the current ratings as a result of capital base erosion. Positive rating actions could take place as a result of the successful evolution of the company's business strategy, while presenting consistently strong operating performance metrics, with improving bottom-line results and profitability indicators to levels more in line with highly rated peers.

The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Jan. 18, 2024), 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:


  • Evaluating Country Risk (Version June 6, 2024)

  • Understanding Global BCAR (Version Aug. 1, 2024)

  • Catastrophe Analysis in AM Best Ratings (Version Feb. 08, 2024)

  • Available Capital and Insurance Holding Company Analysis (Version Aug. 15, 2024)

  • Scoring and Assessing Innovation (Version Feb. 27, 2023)

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, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best’s Credit Ratings.


  • Previous Rating Date: Sept. 21, 2023

  • Initial Rating Date: Sept. 14, 2017

  • Date Range of Financial Data Used: Dec. 31, 2018-June 30, 2024

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

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.

If the ratings referred in this press release do not indicate a specific country suffix, it is understood that they are granted globally and not on a national scale.

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. AM Best keeps certain activities of its business units separate from each other to preserve the independence and objectivity of their respective activities. As a result, certain business units of AM Best may have information that is not available to other AM Best business units. AM Best has established policies and procedures to maintain the confidentiality of certain confidential (non-public) information received in connection with each analytical process. 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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