AM Best Revises Outlooks to Stable and Affirms Credit Ratings of Aseguradora Ancón, S.A.

AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Aseguradora Ancón, S.A. (Ancón) (Panama).

The Credit Ratings (ratings) reflect Ancón’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The stable outlooks reflect Ancon's ability to recoup to historical profitability levels, through effective strategic changes and ongoing support from its group and shareholders.

Ancón’s underwriting performance had been affected by deviations in claims in the health and auto lines of business, its most important segments, which drove the previous negative outlooks. The company made pricing adjustments, as well as dumping unprofitable business, to revert a potential negative trend in its bottom-line results in 2024, which have translated into profitable results that AM Best expects to continue in the coming years.

Ancón’s balance sheet strength is underpinned by risk-adjusted capitalization at an assessed level of strongest, as measured by Best’s Capital Adequacy Ratio (BCAR), and supported by a well-structured reinsurance program, which covers the company’s different business lines. Furthermore, Ancon’s holding company, Ancon Investment Corporation, has demonstrated continued parental support in the form of capital contributions, the latest taking place in March 2024, amounting to USD 2 million.

Ancón is the seventh-largest insurer in Panama, with a market share of 3% as of November 2024. Property/casualty insurance products comprise 65% of its business portfolio, with the remaining 35% made up of life products, including accident and health. The company’s main segments are auto and health, representing 39% and 23%, respectively, of its gross premiums written.

Ancón’s risk-adjusted capitalization has shown stability, despite losses registered during 2023, reflecting the aforementioned shareholder commitment to protect the company’s capital base. Additionally, Ancón maintains its prudent business strategy in terms of retention and growth, as well as a reinsurance program with highly rated reinsurers. In AM Best’s view, this parental support has provided Ancón with an optimized capital structure through a reduced level of financial leverage. AM Best expects Ancón to maintain its balance sheet strength assessment of strongest.

Negative rating actions could be taken if Ancón experiences again an unfavorable trend in underwriting performance driven by extensive losses and rising expenses. Negative rating actions could also take place if the company’s balance sheet strength metrics deteriorate, no longer supporting the strongest assessment. Positive rating actions on Ancón, while not likely, could take place in the medium term driven by a consistent upward trend in operating results that compare favorable to the strong assessment.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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