Best’s News & Research Service - October 05, 2023 02:59 PM (EDT)
AM Best Withdraws Credit Ratings of Triple-S Salud, Inc. and Triple-S Advantage, Inc.
- October 05, 2023 02:59 PM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of Triple-S Saud, Inc. (TSS). The outlook of these Credit Ratings (ratings) is stable. Additionally, AM Best has affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of Triple-S Advantage, Inc. (TSA). The outlook of the FSR is stable while the outlook of the Long-Term ICR is negative. (Both companies are domiciled in San Juan, PR). Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.
The ratings of TSS reflect its balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile, appropriate enterprise risk management (ERM) and strategic importance to the parent organization, GuideWell Mutual Holding Corporation (GuideWell).
The rating affirmations of TSS reflect its risk-adjusted capitalization, which declined to the weak level from strong in 2022, as measured by Best’s Capital Adequacy Ratio (BCAR), resulting from the recent decrease in capital driven by operating losses. However, AM Best expects the parent organization, GuideWell, to provide additional capital should it be necessary. TSS manages the largest health provider network in Puerto Rico and markets a broad array of managed care products; however, operating in a single market, which has been depressed for a prolonged period of time, exposes the group to geographic limitations. AM Best acknowledges the group’s ERM program is integrated into the parent organization and is a formalized process with risk identification, management and mitigation.
The ratings of TSA reflect its balance sheet strength, which AM Best assesses as weak, as well as its adequate operating performance, limited business profile, appropriate ERM and strategic importance to the parent organization, GuideWell.
The ratings affirmation of TSA reflects its risk-adjusted capitalization deteriorating to the very weak level in 2022; however, TSA received a $120 million capital contribution in the second quarter of 2023. Additionally, AM Best expects GuideWell to provide additional capital should it be necessary. The company reported a sizeable loss in 2022 driven by higher-than-anticipated utilization. Additionally, TSA has reported volatility in premium revenue in recent years due to lower membership and premium rate challenges. However, premium growth is expected in the near term. The negative outlook of the Long-Term ICR reflects AM Best’s concerns of further weakening in TSA’s risk-adjusted capitalization.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. 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.