Eight months after entering the Puerto Rico market, Multinational Insurance Company has received a favorable review from prestigious credit ratings agency A.M. Best Co.
On Tuesday, A.M. Best announced it has upgraded Multinational Life Insurance Company’s financial strength rating to B+ (Good) from C++ (Marginal) and issuer credit rating to “bbb-” from “b.” Concurrently, the firm assigned an FSR of B++ (Good) and an ICR of “bbb+” to Multinational Insurance Company. The outlook assigned to both ratings is stable.
In its analysis, A.M. Best said its rating actions reflect Multinational Life Insurance Company’s new ownership structure under Multinational Insurance Company, a wholly owned subsidiary of Panama-based Aseguradora Ancon S.A. The company entered the Puerto Rico market late last year, when it took over the assets of the defunct National Insurance Corp.
“Following a capital infusion from the new owner in the form of preferred stock, Multinational Life’s capitalization has increased to adequate levels,” A.M. Best said. “A number of management initiatives has been put into place, including meaningful cost savings, which have resulted in positive operating results thus far in 2012.”
A.M. Best said it believes the company will continue to generate positive operating earnings that are expected to be retained in support of the current rating.
“These ratings represent a great achievement for our companies,” said Tobías Carrero-Nácar, chairman of the board of both companies. “In the case of Multinational Life Insurance, it’s an even greater achievement that we’ve obtained such ratings given that when we bought the company last November, it had a deficient rating (C++) with a negative outlook.”
Since taking over, Multinational has established a new board of directors, strengthen its management team, reduced operating expenses and established adequate capitalization levels to carry the company forward, CEO Luis Pimentel said.
“This A.M. Best rating further increases the level of confidence of our customers and gives us the opportunity to develop new business relationships that were previously limited by the absence of a rating by A.M. Best,” Pimentel said.
In its report, A.M. best noted that the company’s strengths are partially offset by a history of unprofitable results, declining premium trends and challenges associated with rebuilding a brand and generating sustained profitable premium growth in Multinational Life’s core Puerto Rico marketplace.