AM Best upgrades Patria Re
AM Best has upgraded the financial strength rating of Latin American reinsurer Patria Re to A from A-.
Patria Re’s chief executive officer, Ingrid Carlou, claimed that Patria Re is now the only native Latin American reinsurer to reach this level.
The rating agency also upgraded Patria Re’s issuer credit rating to ‘a’ from ‘a-’ and revised its outlook to stable from positive.
“The upgrade reflects Patria Re’s strong enterprise risk management infrastructure, expansive knowledge of its core Latin American markets and its outperformance of a peer group of regional reinsurers,” said the rating agency.
It added that the reinsurer has established a strong niche position in Mexico and Latin America. This allows it to selectively accept profitable business, while maintaining a diversified product portfolio tailored to specific markets.
“This strategy has resulted in consistently favourable underwriting results and enhanced Patria Re’s risk-adjusted capitalisation,” it added.
Patria Re’s elevated expense structure due to its significant share in proportional contracts, the concentration of equities in its investment portfolio and the company's exposure to frequent and severe catastrophic losses offsets these strengths.
AM Best said: “In addition, Patria Re’s risk profile continues to slowly shift as a result of its assumption of exposures outside of its core markets. While this affords Patria Re additional geographic diversification, it is expanding into highly competitive and mature markets.”
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