Insurance ratings agency A.M. Best on Wednesday revised its outlook on Cooperativa de Seguros de Vida de Puerto Rico (known as Cosvi for its acronym in Spanish), to positive from stable and affirmed the company’s financial strength rating of B- (Fair) and issuer credit rating of “bb-.”
The 50-year-old life insurance company owned by cooperative organizations in Puerto Rico has reflected improved operating results, risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio and a strategic shift to stable and profitable lines of business, A.M. Best noted as reasons for its positive opinion.
This year Cosvi has improved its bottom line and risk-adjusted capitalization through positive net gains associated with the sale of its unprofitable group health plan and Medicare Advantage lines of business.
“However, residual losses from the run off of these businesses continue to impact the current year’s operating results,” A.M. Best said, adding that “the combined results of COSVI’s remaining lines of business, including life, annuities, credit life and individual accident and health, produced favorable statutory operating gains in the most recent period and increasing positive results are projected going forward.”
Another plus, A.M. Best said, is the willingness of COSVI’s members to support the entity’s financial flexibility.