A.M. Best has placed Triple-S Propiedad Inc.’ Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” under review with negative implications, following the company’s recently announced significant decline in policyholder surplus.
The decline was driven by adverse development on losses from Hurricane María of approximately $76.4 million ($47.5 million after-tax.) As a result of the increased losses, storm claims subsequently exceeded the company’s available reinsurance protection.
“The magnitude of the additional losses relative to amounts previously disclosed to A.M. Best earlier this year drives further uncertainty regarding the effectiveness of the company’s enterprise risk management program,” the credit ratings agency stated.
“While the company has a number of initiatives under consideration to bolster capital, including support from the parent company, Triple-S Management Corporation, the ultimate adequacy of these initiatives is uncertain,” A.M. Best said.
Accordingly, the ratings will remain under review pending A.M. Best’s analysis of the company’s business plans, it added.
Triple-S announced its quarterly results last week, which revealed a significant net loss related to Hurricane María-related claims, as this media outlet reported.