AM Best Affirms Credit Ratings of Pacífico Compañía de Seguros y Reaseguros S.A.

DECEMBER 11, 2024 01:16 PM (EST)

AM Best Affirms Credit Ratings of Pacífico Compañía de Seguros y Reaseguros S.A.

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FOR IMMEDIATE RELEASE

MEXICO CITY - DECEMBER 11, 2024 01:16 PM (EST)
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" (Excellent) of Pacífico Compañía de Seguros y Reaseguros S.A. (PCS) (Lima, Perú). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect PCS' balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The stable outlooks reflect resilience of PCS' balance sheet strength, despite macroeconomic concerns surrounding Peru's political landscape.

The ratings of PCS also reflect the company's strong market share in Perú's insurance industry, as well as its comprehensive and well-diversified reinsurance program.

PCS is Perú's second largest insurer with a market share of 24%, as of October 2024. Life insurance comprises a little over half of the company's business portfolio, with non-life insurance making up the remaining percentage. The company's ultimate parent is Perú's largest financial holding company, Credicorp Ltd. [NYSE: BAP], which had over USD 68 billion in assets as of December 2023.

PCS' risk-adjusted capitalization stands at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR); significant positive bottom-line results allowed the company to widen its capital base in the past few years. PCS continues to benefit from risk mitigation achieved through diversification in both its business and investment portfolios, as well as a robust and comprehensive reinsurance program with highly rated reinsurers.

PCS has maintained an adequate level of operating performance. Underwriting adjustments made by the company in its sensitive pension-fund related business lines such as life, health and insurance to counter stress from the effects of the COVID-19 pandemic resulted in visible improvements. This translated into significant profitable results by year-end 2022 and even stronger results during 2023, which continued to show a positive trend as of October 2024.

Positive rating actions could occur if the company is able to demonstrate a favorable, consistent trend in underwriting results that is supportive of a strong assessment for operating performance. Negative rating actions may occur if the company experiences an unfavorable trend in underwriting performance, which results in the constant reporting of net losses that impacts the company's risk-adjusted capitalization.

The methodology used in determining these ratings is Best's Credit Rating Methodology (Version Aug. 29, 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. 8, 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: Dec. 15, 2023

· Initial Rating Date: Sept. 15, 2016

· Date Range of Financial Data Used: Dec. 31, 2018-Oct. 31, 2024

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

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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.

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