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A.M. Best Affirms Credit Ratings to Maxseguros EPM Ltd.
[August 31, 2017]

A.M. Best Affirms Credit Ratings to Maxseguros EPM Ltd.


A.M. Best has affirmed Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of "a-" of Maxseguros EPM Ltd. (Maxseguros) (Bermuda). The outlook for these Credit Ratings (ratings) is stable.

The ratings reflect Maxseguros' strong risk-adjusted capitalization, supported by a comprehensive and adequate reinsurance program, history of consistently strong operating performance, sound risk management capabilities and conservative balance sheet strategies. The ratings also recognize the support of its parent, Empresas Publicas de Medellin E.S.P. (EPM), owned by the Colombian municipality of Medellin. EPM is the largest power generation and multi-utility company in Colombia. Maxseguros is a single-parent captive insurer wholly owned by EPM, which provides reinsurance to the EPM group, covering property damage and business interruption, commercial crime, directors' and officers' and construction liability exposures.

These positive rating factors are partially offset by Maxseguros' limited business and market scope, which is somewhat mitigated by the company's stable loss history, favorable geographic spread of risk and the history of Maxseguros' growing surplus position and the support of its ultimate parent, EPM. Additionally, while Maxseguros depends on reinsurance, EPM's senior management is intimately involved in the captive's operations.

A.M. Best believes Maxseguros is well-positioned to sustain a strong level of operating performance due to its demonstrated risk management expertise and conservative underwriting criteria, hence, the stable outlooks.

A.M. Best has a favorable view of Maxseguros' overall profile within the ultimate parent's structure and recognizes the benefits inured from this. Particular attention is paid to EPM senior management's active involvement.

Positive rating trigers could include sustained positive operating results and improved risk-adjusted capitalization.

Negative rating impact could occur if underwriting performance declines or demonstrates volatility that negatively impacts earnings and capitalization over time. Negative rating impact could also occur if there is a material shift in risk profile that could potentially undermine the stability and profitability of the company, or if financial issues arise and place pressure on the ratings or the parent's credit profile.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best's Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.


This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.


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