Integrand downgraded due to hurricane impact
AM Best has downgraded the Financial Strength Rating to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “bbb+” from “a-” of Puerto Rico-based Integrand Assurance Company while placing the Credit Ratings (ratings) under review with negative implications.
Integrand provides property, casualty and reinsurance services and surety bonds.
The rating actions follow the company’s recently filed third-quarter statutory statement, which reflects a sizable decline in policyholder surplus due to adverse development on hurricane Maria and Irma losses of approximately $15 million, AM Best said.
Hurricanes Irma and Maria caused significant damage in the US and Caribbean in the third quarter of 2017.
The Integrand rating downgrades reflect a limited business profile and marginal enterprise risk management (ERM), AM Best explained.
The assessment downgrade was driven by the size of the additional catastrophe losses relative to amounts previously disclosed to AM Best, which creates uncertainty regarding the company’s ERM program, the agency noted.
Additionally, while the rate of new claims associated with hurricane Maria and Irma has slowed more recently, the potential for additional development remains an ongoing concern, AM Best said.
Furthermore, the company has considerable exposure to reinsurance recoverables, which exposes capital to potential dispute risk and could potentially change AM Best’s current assessment of capital. Accordingly, these ratings will remain under review pending AM Best’s analysis of the company’s business plans.
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