AM Best Revises Issuer Credit Rating Outlook to Positive for Cooperativa de Seguros de Vida de Puerto Rico

AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of C (Weak) and the Long-Term ICR of “ccc” (Weak) of Cooperativa de Seguros de Vida de Puerto Rico (COSVI) (San Juan, Puerto Rico). The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect COSVI’s balance sheet strength, which AM Best assesses as very weak, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.

The positive outlook on the Long-Term ICR is related to the expected continued efforts to improve risk-adjusted capitalization in the near term, as measured by Best’s Capital Adequacy Ratio (BCAR). This is led by management’s strategic initiatives, including organic growth over the last few years, as well as anticipated additional improvement in the company’s overall risk management. While AM Best asserts that the balance sheet strength assessment is still very weak, recognizable material improvements have been made over the medium term, and surplus and risk-adjusted capital is expected to continue to improve going forward.

COSVI’s absolute level of capital continued to increase as of year-end 2024, by another 3.8% compared with the prior year, as a result of an operating income of almost $1 million. The company’s risk-adjusted capitalization, as measured by BCAR, continued to improve slightly but remains assessed as very weak. Unadjusted financial leverage remains just within AM Best’s tolerances, and quality of capital remains neutral to COSVI’s ratings. AM Best notes that COSVI will also need to demonstrate a continued trend of executing its capital management plan along with additional support by the shareholders before any potential upward movement in the balance sheet strength assessment is contemplated. AM Best will continue to monitor progress closely on all initiatives presented.

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.

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