A.M. Best Revises Issuer Credit Rating Outlook to Positive for Worldwide Medical Assurance, Ltd. Corp.
Salvador Smith, +52 55 1102 2720, ext. 109
Associate Financial Analyst
Alfonso Novelo, +52 55 1102 2720, ext. 107
Senior Director, Analytics
Christopher Sharkey, +1 908-439-2200, ext. 5159
Manager, Public Relations
Jim Peavy, +1 908-439-2200, ext. 5644
Director, Public Relations
A.M. 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 B++ (Good) and the Long-Term ICR of “bbb” of Worldwide Medical Assurance, Ltd. Corp. (WWMA) (Panama City, Panama). The outlook of the FSR remains stable.
The revised Long-Term ICR outlook to positive reflects WWMA’s continued strong risk-adjusted capitalization, conservative investment strategy, strong underwriting practices, improved profitability indicators and successful gradual expansion into other Latin American markets. These strengths are offset by the company’s dependence on its reinsurance counterparties to implement its growth targets and the highly competitive landscape in Latin America’s health and life insurance segments.
The company began operations in 1999 and has grown successfully in its niche market, providing insurance for clients traveling overseas to receive medical attention. This is done through a mix of brokers, bancassurance and direct distribution channels. Through holding company, Worldwide Group, Inc., WWMA benefits from its partial ownership by KfW DEG, the German development bank, its model to optimize the selection of medical care providers and the support from highly rated reinsurance counterparties. During the past three years, WWMA has expanded operations into other Latin American markets such as Guatemala, Bolivia and Paraguay.
Historically, WWMA has maintained positive capital creation capacity, which along with a conservative profits reinvestment strategy, has contributed to its strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Capital management is strengthened further by the use and development of WWMA’s economic capital model and enterprise risk management practices.
WWMA’s strong underwriting, risk retention and stringent expense practices translate into strong premium sufficiency metrics. Moreover, WWMA’s synergies with its sister company in the Dominican Republic, have optimized the company´s underwriting. These measures, combined with stable financial products, have resulted in improved profitability indicators. Performance indicators such as return on equity and return on assets were 24.4% and 9.3%, respectively, at year-end 2016. A.M. Best expects this trend to continue in the near to medium term.
Rating factors that could lead to positive rating actions include sustained stable operating performance, successful consolidation of company operations in targeted locations and maintaining diversification across highly rated reinsurers. Negative rating actions are not expected in the short term unless significant changes in the company’s strategy damage its income-generating profile or if there is material deterioration of current capital adequacy ratios, as measured by BCAR.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
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