AM Best Revises Outlooks to Positive for Reaseguradora Santo Domingo, S.A.; Affirms Credit Ratings
MEXICO CITY--(BUSINESS WIRE)-- AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of 'bb+' (Fair) of Reaseguradora Santo Domingo, S.A. (REASANTO) (Dominican Republic).
The Credit Ratings (ratings) reflect REASANTO's balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The rating outlook revisions reflect AM Best's expectation that REASANTO will continue with its positive trend in operating performance, reflecting prudent underwriting practices and profit generation capabilities.
REASANTO is a reinsurance company founded in 1973 in Santo Domingo, Dominican Republic. The company focuses its product offerings on the fire and allied business lines. In 2024, the company started underwriting business in Central America following its plan to expand operations to other countries; however, business continues to be concentrated in the Dominican Republic. The company's business profile is considered limited given its geographic and business line concentration. AM Best will continue to monitor the deployment of REASANTO's business strategy outside the country.
REASANTO's balance sheet strength assessment of strong is based on its strongest level of risk-adjusted capitalization in 2024, as measured by Best's Capital Adequacy Ratio (BCAR). The company continues to adjust its exposures to probable maximum losses by actively managing its reinsurance program and aiming to reduce volatility in its capital base. Mitigating these factors is a conservative investment strategy and an adequate reinsurance panel.
The company's operating performance is assessed as adequate, driven by consistent net income that is backed by contained expenses and claims targeted to diminish deviations in REASANTO's budget and improve its underwriting quality. The company's ERM is considered appropriate with defined policies and procedures to maintain risk tolerance levels. These are well-adhered to and reviewed periodically.
Positive rating actions could occur if the company's underwriting performance and profit generation capabilities continue to strengthen, supporting the current level of risk-adjusted capitalization.
Negative rating actions could take place if the company's risk-based capital erodes to a level no longer supportive of the current ratings resulting from a sharp deterioration in operating performance.
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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