A.M. Best Downgrades Credit Ratings of Triple-S Propiedad, Inc.; Places Credit Ratings of Triple-S Management Corp. & Other S...
November 16 2018 - 2:39PM
Business Wire
A.M. Best has downgraded the Financial Strength Rating
(FSR) to B+ (Good) from A- (Excellent) and the Long-Term Issuer
Credit Ratings (Long-Term ICR) to “bbb-” from “a-” of Triple-S
Propiedad, Inc. (Triple-S Propiedad) (Guaynabo, Puerto Rico). These
Credit Ratings (ratings) remain under review with negative
implications. Additionally, A.M. Best has placed under review with
negative implications the FSR of B++ (Good) and the Long-Term ICR
of “bbb+” of Triple-S Salud, Inc. and Triple-S Vida, Inc. Also,
A.M. Best has placed under review with negative implications the
FSR of B++ (Good) and the Long-Term ICR of “bbb” of Triple-S Blue,
Inc., I.I. Furthermore, A.M. Best has placed under review with
negative implications the Long-Term ICR of “bb+” of Triple-S
Management Corporation [NYSE: GTS]. Unless otherwise specified, all
companies are domiciled in San Juan, Puerto Rico.
The rating downgrades reflect A.M. Best’s revised assessment of
Triple-S Propiedad’s balance sheet strength, which A.M. Best
categorizes as adequate, its adequate operating performance,
limited business profile and marginal enterprise risk management
(ERM). These rating actions follow the company’s recently announced
3rd quarter decline in policyholder surplus due to additional
development on Hurricane Maria losses of approximately $52 million,
in addition to the development of $76.4 million reported in the
second quarter of 2018 (See press release dated August 3, 2018). As
noted, A.M. Best has revised the assessment of Triple-S’s ERM,
which A.M. Best categorizes as marginal. The assessment downgrade
was driven by the size of the additional catastrophe losses
relative to amounts previously disclosed to A.M. Best, which
creates uncertainty regarding the company’s ERM program.
While the company has commenced and implemented a number of
initiatives to improve capital, including acquiring retroactive
reinsurance and support from the parent company, Triple-S
Management Corporation, the ultimate effectiveness of these
initiatives is uncertain. Additionally, while the rate of new
claims associated with Hurricane Maria has slowed more recently,
the potential for additional development remains an ongoing
concern. Accordingly, the ratings will remain under review pending
A.M. Best’s analysis of the company’s business plans.
The under review with negative implications status for Triple-S
Management Corporation, Triple-S Salud, Triple-S Vida and Triple-S
Blue reflects A.M. Best’s concerns that the impact of the issues at
Triple-S Propiedad could have on the capitalization of the
regulated entities and the liquidity at the holding company. The
ratings will remain under review while A.M. Best conducts
discussions with senior management as well as an update to the
review of the proposed corrective action plan for Triple-S
Propiedad.
This press release relates to Credit Ratings that have been
published on A.M. 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 A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20181116005502/en/
Brian O’LarteDirector—P/C+1 908 439 2200, ext.
5138brian.o'larte@ambest.comJoseph
ZazzeraDirector—L/H+1 908 439 2200, ext.
5797joseph.zazzera@ambest.comChristopher
SharkeyManager, Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comJim PeavyDirector,
Public Relations+1 908 439 2200, ext.
5644james.peavy@ambest.com
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