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

AUGUST 23, 2024 03:12 PM (EDT)

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

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FOR IMMEDIATE RELEASE

MEXICO CITY - AUGUST 23, 2024 03:12 PM (EDT)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a+" (Excellent) of Chubb Perú S.A. Compañía de Seguros y Reaseguros (Chubb Peru) (Lima, Peru). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Chubb Peru'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 (ERM).

The stable outlooks reflect AM Best's expectation that the company can continue to adjust its product offerings in a profitable manner, supported by its parent company, Chubb Limited.

Chubb Peru initiated operations in 1998 as Altas Cumbres; in 2007, it was acquired by ACE Group and named ACE Seguros S.A., until 2016, when ACE Limited acquired The Chubb Corporation and re-branded the company.

Chubb Peru has a diversified book of business, distributed through a mix of traditional and massive channels, such as large regional retailers and banks. As of December 2023, 65% of the company's gross written premium was composed of property/casualty products, with accident and health comprising 28% of the portfolio and life insurance the remaining 7%. As of July 2024, Chubb Peru is the 12th largest insurance operation in Peru.

AM Best has revised Chubb Peru's balance sheet strength from very strong to strongest, as its risk-adjusted capitalization stands at the strongest level as measured by Best's Capital Adequacy Ratio (BCAR), has a defined risk appetite that limits exposures and protects its solid capital base through adequate investment, reinsurance and underwriting principles. Additionally, the company has a comprehensive reinsurance program with its affiliate, Chubb Tempest Reinsurance Ltd., and has continuously increased its total capital base reaching USD 42 million at the end of second-quarter 2024. Chubb Peru's risk-adjusted capitalization has remained stable due to the growth of its total capital base from retained earnings, which has benefited from previous adjustments in its business offerings, despite dividend payments.

The company's year-end 2023 results reflect a slight increase in claims in contrast to 2022, countered by lower operating expenses, finally improving its combined ratio to 66.6% and increasing its net income by 25% from last year. Chubb Peru's maintains good profitability metrics, continuing with its strategy to focus on generating value to its business portfolio and limiting exposures to challenging and more competed segments.

Chubb Peru benefits from its integration into the Chubb group, gaining operational advantage through the same systems, procedures and ERM practices. The group has demonstrated its support to Chubb Peru by providing a comprehensive reinsurance program with its affiliate and actively overseeing this strategy.

Positive rating actions could occur if the company maintains its good operating performance results in the short term. Conversely, the ratings could be downgraded if AM Best determines that the strategic importance of Chubb Peru to its group has diminished.

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:

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• Evaluating Country Risk (June 6, 2024)
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• Understanding Global BCAR (Aug. 1, 2024)
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• Catastrophe Analysis in AM Best Ratings (Feb. 08, 2024)
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• Available Capital and Insurance Holding Company Analysis (Aug. 15, 2024)
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• Scoring and Assessing Innovation (Feb. 27, 2023)
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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.

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• Previous Rating Date: Nov. 10, 2023
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• Initial Rating Date: Nov. 9, 2018
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• Date Range of Financial Data Used: Dec. 31, 2018-May 31, 2024
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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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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.

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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.