AM Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” (Good) from “bbb-” (Good) of Acerta Compañia de Seguros, S.A. (Acerta) (Panama City, Panama). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect Acerta’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The upgrading of Acerta’s ratings is based on its consistent adjustments in underwriting practices, which positively influence its operating performance, while expanding its capital base, as well as the improvements and expected stability in the company’s ERM framework.

The ratings also recognize Acerta’s affiliation to Grupo Prival, S.A., its ultimate parent, following management´s decision to reduce pressure in the regulatory capital requirement of its main financial institution, Prival Bank S.A., through major shareholder ownership of its insurance operation.

Acerta initiated operations in Panama City in 2010, and in 2017, the company acquired ADISA Panama. As of December 2023, the company stood as Panama’s 12th largest insurer, with a market share of 1.7%. Its main insurance lines of business are surety, motor and health, which are based on gross written premiums. Acerta operates through a network of agents, brokers and direct distribution channels.

The company’s capital and surplus has grown at a compound annual growth rate of 8.0% over the last five years, supported by profitability, as reflected by a return on equity of 10.9% in 2023. Acerta’s capitalization is reinforced by a diversified reinsurance program with highly rated entities. Moreover, its capitalization and liquidity have provided the company with flexibility in order to cover historical deviations in claims.

Acerta’s continuous claims-containment adjustments within its motor, multiple risks and health insurance lines, coupled with its expertise in the surety business, continue to reflect improvements in underwriting performance, evidenced by premium sufficiency as of year-end 2023. AM Best expects Acerta to sustain this trend through year-end 2024, supported by renovation of current contracts and an improved performance in its property/casualty business, despite challenges arising from a very competitive market and economic uncertainty.

Although unlikely in the near term, positive rating actions could take place if Grupo Prival, S.A 's ability and willingness to support Acerta continues, while showing a consistent stability in its performance and credit profile. Negative rating actions could take place if the deterioration of the Panamanian market conditions or an unfavorable development of the company's business strategy render the operating performance to levels no longer supportive of the adequate assessment. Additionally, negative rating actions could also occur as a result of a deterioration within the ultimate parent's credit profile.

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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