A.M. Best upgrades TOLIC’s rating to ‘BBB+’
A.M. Best Co. has upgraded Guaynabo-based Trans-Oceanic Life Insurance Company’s issuer credit rating (ICR) to “bbb+” from “bbb” and affirmed the financial strength rating of B++. The outlook for the FSR is stable, while the outlook for the ICR has been revised to stable from positive.
The upgrade to the ICR reflects TOLIC’s “trend of stable and profitable operating results, maintenance of favorable risk-adjusted capitalization and increased profitable net premiums written,” A.M. Best said.
“The ratings also consider TOLIC’s favorable market position in the individual accident and health line in Puerto Rico,” the reputable agency noted.
Partially offsetting these positive rating factors are the company’s significant reliance on the individual accident and health business for profitability, inherent risks associated with this core line of business and the overall weak state of the Puerto Rican economy.
“Although the company maintains a considerable concentration in its accident and health segment, A.M. Best notes that TOLIC has managed this line of business effectively and exhibited stable and profitable results,” A.M. Best said.
A.M. Best believes TOLIC’s ratings are well-positioned at the current rating level. However, factors that could lead to potential negative rating actions include a significant decrease in the company’s risk-adjusted capitalization, operating losses or considerably weaker results in its core health segment or further product concentration.
