AM Best Affirms Credit Ratings of Seguros Reservas S.A.
01 August 2024 - 8:41PM
Business Wire
AM Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of “a-”
(Excellent) of Seguros Reservas S.A. (Seguros Reservas) (Santo
Domingo, Dominican Republic). The outlook of these Credit Ratings
(ratings) is stable.
The ratings reflect Seguros Reservas’ balance sheet strength,
which AM Best assesses as strongest, as well as its strong
operating performance, neutral business profile and appropriate
enterprise risk management (ERM).
Seguros Reservas’ balance sheet strength is underpinned by its
risk-adjusted capitalization at the strongest level, as measured by
Best’s Capital Adequacy Ratio (BCAR). The ratings also reflect its
strong operating performance, driven by consistent profitability,
which comes from a diversified book of business, as well as a
contained underwriting leverage, and the company’s affiliation with
Banco de Reservas de la República Dominicana, Banco de Servicios
Múltiples (Banco de Reservas), the largest bank in the Dominican
Republic.
Partially offsetting these positive rating factors is the strong
competition in the Dominican Republic’s insurance market, which AM
Best believes could pressure Seguros Reservas’ profitability and
market share, its high dividend payout ratios, as well as an ERM
framework that has room for further sophistication.
Seguros Reservas underwrites life and non-life businesses and is
one of the leading insurers in the Dominican Republic, currently
holding a 17.5% market share as of December 2023.
In 2023, fire insurance continued to represent Seguros Reservas’
main line of business, accounting for 33% of gross written premium,
followed by auto (26%) and group life (12%), with the remainder
(29%) in other lines of business. The company has shown disciplined
underwriting in a highly competitive market, consistently reporting
profitability that compares favorably with its closest competitors.
In addition, investment income has remained stable, further
contributing to positive bottom-line results.
Seguros Reservas’ risk-adjusted capitalization stands at the
strongest level, as measured by BCAR. Adjusted capital has grown at
a compound annual growth rate of 13.8% during the last five years,
and AM Best expects this trend to continue supported by sound
underwriting, prudent dividend and investment policies, as well as
an effective cost containment strategy. Furthermore, Seguros
Reservas continues to benefit from operating efficiencies afforded
by Banco de Reservas.
Positive rating actions could take place as a result of the
continued growth of Seguros Reservas’ capital base in the medium
term, supportive of the current level of risk-adjusted
capitalization and successful consolidation of the business
strategy. Negative rating actions could occur if the company’s
risk-adjusted capitalization deteriorates to a level no longer
supportive of the current ratings. Negative rating actions also
could take place as a result of a sustained deterioration in the
company’s operating performance metrics to levels no longer
supportive of the strong assessment.
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. For more
information, visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Olga Rubo, FRM Senior Financial Analyst +52 55
1102 2720, ext. 134 olga.rubo@ambest.com Alfonso Novelo
Senior Director, Analytics +52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com Christopher Sharkey Associate
Director, Public Relations +1 908 882 2310
christopher.sharkey@ambest.com Al Slavin Senior Public
Relations Specialist +1 908 882 2318
al.slavin@ambest.com