AM Best assigns ‘Good’ credit ratings to Popular Re Inc.
The Puerto Rico-based reinsurer earns a stable outlook, supported by strong capitalization and risk management.
Credit rating agency AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb” (Good) to Popular Re Inc., the property and casualty reinsurer of Popular Inc., Puerto Rico’s largest financial institution. The ratings have been given a stable outlook.
“The assessment reflects Popular Re’s strong balance sheet, adequate operating performance, limited business profile and appropriate enterprise risk management (ERM),” AM Best stated.
However, the agency noted that the weaker credit profile of parent company Popular Inc. affects Popular Re’s overall rating.
Founded in 2022, Popular Re plays a key role in Popular Inc.’s risk management strategy, providing reinsurance for property and casualty lines. The company’s balance sheet is supported by strong risk-adjusted capitalization, a conservative investment portfolio and favorable liquidity metrics.
AM Best considers Popular Re’s loss reserves adequate, though the company’s reserve history is still developing, particularly for longer-tail business lines.
Its operating performance has been modest, driven primarily by investment income. While the company’s combined ratio has been higher than industry peers in its early years, AM Best expects underwriting profitability in the coming year.
Due to its Puerto Rico concentration, Popular Re’s business profile remains geographically limited, though it diversifies risk by underwriting financial and property lines for its parent company. AM Best considers Popular Re’s ERM framework appropriate and well-integrated within Popular Inc.’s broader risk management program.
“As Popular Re continues to develop, AM Best will monitor its financial performance, underwriting results, and capital strength to determine any potential changes in its ratings,” the agency stated.
