A.M. Best affirms ASSA rating

A.M. Best has affirmed the financial strength rating of A (Excellent) of Panamanian insurer ASSA Compania de Seguros with a stable outlook, the rating agency said in a statement. The rating is based on ASSA's solid capitalization, historically favorable operating profitability and its well-established market presence as one of the top life and non-life insurance providers in the Panamanian marketplace. Offsetting these positive rating factors are the company's geographic concentration in Panama and the competitive pressures on its core life lines of business, which will challenge earnings going forward. These positive rating attributes are derived from ASSA's prudent underwriting supported by investments in technological upgrades and its conservative investment portfolio. Over the years, these have enabled ASSA to outperform most of its regional peers. The rating also recognizes ASSA's favorable non-life loss ratio trends exhibited over the last five years, its well diversified and innovative product offerings and the financial flexibility of its publicly-traded parent, Grupo ASSA. Management continues to target the Central American region with strategic investments that offer strong synergies and growth opportunities. Partially offsetting these positive rating factors is the company's current business concentration in Panama, which subjects it to the country's economic and regulatory risk. In addition, ASSA continues to be challenged by adverse underwriting results in its core life lines of business, which is attributable to price competition and increased claim levels.