A.M. Best has upgraded the financial strength rating to B++
(Good) from C++ (Marginal) and issuer credit rating to "bbb" from "b+"
of Atlantic Southern Insurance Company (Atlantic Southern) (San
Juan, PR). The ratings have been removed from under review with positive
implications and assigned a stable outlook.
These actions reflect the completion of the acquisition of Atlantic
Southern by Triple-S Vida, Inc. (San Juan, PR), a subsidiary of Triple-S
Management Corporation (TSM) (San Juan, PR) [NYSE: GTS] and A.M.
Best's discussions with management regarding plans for Atlantic
Southern. Previously, the published ratings of Atlantic Southern
reflected the weak financial position of its former parent, North
America Life Insurance Company (Austin, TX).
The rating upgrades reflect the ownership by a financially stronger
parent as well as the benefits from integrating Atlantic Southern's
operations in the near to medium term. Furthermore, the acquisition
provides the TSM organization with a gateway into the Central and South
American life and health insurance market.
Atlantic Southern is adequately capitalized for its current operations.
Additionally, the ultimat parent company, TSM, has a history of
providing financial support to its subsidiaries when the need arises.
Atlantic Southern offers a number of licenses to operate in the
Caribbean region as well, making it a true international corporation.
Brand recognition is expected to be strong in its main market, Costa
Even though Atlantic Southern has established operations in Costa Rica,
the market is new to TSM and requires caution. Although Atlantic
Southern is domiciled in Puerto Rico, A.M. Best views the economic,
political and financial system risk for Costa Rica as being relatively
high. However, A.M. Best recognizes that the Triple-S organization
shares many cultural and language ties with Costa Rica. The initial
operating scale is expected to be small in the first few years as the
company hones its product designs to fit the new marketplace.
Key factors that could result in future positive rating actions include
further integration into the TSM organization, improvement in operating
results and favorable trends in capitalization.
Factors that could result in future negative rating actions include
continued weak operating performance, reduction in capital or failure to
execute on strategy.
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS
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