DECEMBER 12, 2024 11:56 AM (EST)

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

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FOR IMMEDIATE RELEASE

MEXICO CITY - DECEMBER 12, 2024 11:56 AM (EST)
AM Best has affirmed the Financial Strength Rating of A++ (Superior) and the Long-Term Issuer Credit Rating of "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 Chubb Limited, 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 rating affirmations reflect Chubb Panama's integration and support from Chubb Limited, one of the world's largest insurance groups, which provides synergies and operating efficiencies to the Panama subsidiary.

The stable outlooks reflect AM Best's expectation that Chubb Limited 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 ratings reflect Chubb Panama's sound underwriting practices, which support its consistent operating performance, diversified business portfolio and solid reinsurance program, with Chubb Tempest Reinsurance Ltd. 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 underwrites, 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. Chubb Panama underwrites mainly non-life and reinsurance businesses that covers exposures throughout Panama and Central America. In 2023, property stood as the company's main business line, generating 32% of its gross 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 2023, Chubb Panama achieved a combined ratio of 73%, down from 81% in 2022, benefiting from a lower loss ratio.

Chubb Panama's strong underwriting results have sustained its sound overall profitability, as reflected in a return on equity of 27% in 2023. 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.

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

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:

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

· Catastrophe Analysis in AM Best Ratings (Version Feb. 8, 2024)

· Evaluating Country Risk (Version June 6, 2024)

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

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

· The Treatment of Terrorism Risk in the Rating Evaluation (Version May 23, 2024)

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. 7, 2023

· Initial Rating Date: July 17, 2013

· Date Range of Financial Data Used: Dec. 31, 2019-Sept. 30, 2024

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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.