A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B+ (Good) and issuer credit rating of “bbb-” of Puerto Rico’s Multinational Life Insurance Company in Hato Rey.
MLIFE markets a diversified product portfolio primarily through personal producing agents, general agents, brokers and direct marketing. A general portfolio of ordinary life, group life, credit life and accident and health insurance products are marketed and sold predominantly in Puerto Rico. MLIFE’s health business is concentrated in cancer, disability income and accident policies.
Carlos Iguina-Oharriz, President of Multinational Life Insurance Company said “the measures taken, among them cost and expense reduction, a staff with vast knowledge of the local insurance industry coupled with an operational plan aimed at highlighting our strengths within the industry, have contributed to the company’s return to profitability and positive outlook. This has also resulted in new business opportunities for our producers and brokers.”
The positive outlook reflects MLIFE’s financial and managerial support and the commitment from MLIFE’s parent, Multinational Insurance Company, a wholly owned subsidiary of Aseguradora Ancon SA, an insurer domiciled in Panama, ultimately owned by Tobias Carrero Nacar, A.M. Best said in its analysis.
“A capital infusion from the owners in the form of preferred stock in 2011, coupled with substantially improved operating results beginning in 2012, enabled MLIFE’s capitalization to increase to more appropriate levels,” the agency further noted.
“A number of management initiatives have been put into place, including meaningful cost savings, which have contributed to the company’s return to profitability. A.M. Best believes MLIFE will continue to generate positive operating earnings, which are expected to retain the current rating level,” the agency said.
Partially offsetting these strengths include a history of unprofitable results, declining premium trends and challenges associated with rebuilding a brand and generating sustained profitable premium growth in MLIFE’s core Puerto Rico marketplace.
Key rating factors that could result in positive rating actions include continued growth in MLIFE’s risk-adjusted capitalization, maintenance of favorable operating results and the continued support of the new owners. Factors that could result in negative rating actions include a decrease in risk-adjusted capitalization or total capital, operating losses and reduced support from the new owners.