AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (ICR) of “a+” (Excellent) for MAPFRE Panamá S.A. (MAPFRE Panamá), based in Panama City, Panama. The outlook for both ratings remains stable.
These ratings reflect MAPFRE Panama’s strategic and geographical significance to its parent company, MAPFRE S.A., and its integration into the group’s practices, procedures, reinsurance strategies, underwriting, and enterprise risk management (ERM). MAPFRE Panama benefits from operational synergies as a key member of the MAPFRE Group, which AM Best assesses as having very strong balance sheet strength, solid operating performance, a favorable business profile, and sound risk management.
In 2023, MAPFRE Panama ranked as the third-largest insurance company in Panama, excelling in the health insurance and surety bond markets. The company’s ratings also reflect its robust capital base, strong reserve position, and risk-adjusted capitalization, as measured by AM Best’s Capital Adequacy Ratio (BCAR). These factors contribute to its financial flexibility and stability. AM Best expects MAPFRE Panama to maintain its solid capitalization and continue adhering to the ERM standards set by the MAPFRE Group.
Despite these strengths, MAPFRE Panama faces challenges from the highly competitive Panamanian insurance market, particularly in the property and casualty sector. The company’s combined ratio has worsened since 2021, primarily due to increased claims in its health and automobile lines, compounded by inflationary pressures. However, MAPFRE Panama has made progress in improving its technical results in 2024, focusing on strict claims management and cost control, especially within its life insurance business.
The competitive landscape in Panama continues to pose operational challenges, particularly in auto, individual life, and health insurance segments, which remain critical areas for MAPFRE Panama. Any negative rating actions affecting the MAPFRE Group could also impact MAPFRE Panama’s ratings, especially if the group’s operating performance or risk-adjusted capitalization deteriorates. A change in MAPFRE Panama’s perceived strategic importance to the group could likewise affect its ratings.
About AM Best:
AM Best is a global credit rating agency and data provider specializing in the insurance sector. Headquartered in the United States, the company operates in over 100 countries, with offices in London, Amsterdam, Dubai, Hong Kong, Singapore, and Mexico City. For further information, visit www.ambest.com.
