A.M. Best has upgraded Atlantic Southern Insurance Company’s financial strength rating to B++ (Good) from C++ (Marginal) and issuer credit rating to “bbb” from “b+.” The ratings have been removed from under review with positive implications and assigned a stable outlook, the agency said Wednesday.
These actions reflect the completion of the acquisition of Atlantic Southern by Triple-S Vida Inc., a subsidiary of Triple-S Management Corp. and A.M. Best’s discussions with management regarding plans for Atlantic Southern, the agency noted in its report.
Previously, the published ratings of Atlantic Southern reflected the weak financial position of its former parent, Austin, TX-based North America Life Insurance Co.
“The rating upgrades reflect the ownership by a financially stronger parent as well as the benefits from integrating Atlantic Southern’s operations in the near to medium term. Furthermore, the acquisition provides the TSM organization with a gateway into the Central and South American life and health insurance market,” A.M. Best said.
“Atlantic Southern is adequately capitalized for its current operations. Additionally, the ultimate parent company, [Triple-S Management], has a history of providing financial support to its subsidiaries when the need arises,” the agency said.
Atlantic Southern offers a number of licenses to operate in the Caribbean region as well, making it an international corporation. Brand recognition is expected to be strong in its main market, Costa Rica, the agency said.
However, A.M. Best said that although Atlantic Southern has established operations in Costa Rica, the market is new to Triple-S Management and requires caution.
Although Atlantic Southern is based in Puerto Rico, A.M. Best views the economic, political and financial system risk for Costa Rica as being relatively high.
“However, A.M. Best recognizes that the Triple-S organization shares many cultural and language ties with Costa Rica. The initial operating scale is expected to be small in the first few years as the company hones its product designs to fit the new marketplace,” it said.