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A.M. Best Revises Outlook to Stable for Members of MAPFRE U.S.A. Group
[April 09, 2014]

A.M. Best Revises Outlook to Stable for Members of MAPFRE U.S.A. Group

OLDWICK, N.J. --(Business Wire)--

A.M. Best has revised the outlook to stable from negative and affirmed the financial strength rating of A (Excellent) and issuer credit ratings of "a" of the members of MAPFRE U.S.A. Group (MAPFRE USA). The lead company in MAPFRE USA is The Commerce Insurance Company (Webster, MA) and includes its inter-company pool members, Citation Insurance Company (Webster, MA), Commerce West Insurance Company (Pleasanton, CA (News - Alert)), American Commerce Insurance Company (Columbus, OH), MAPFRE Insurance Company of New York (Garden City, NY), MAPFRE Insurance Company of Florida (Miami, FL) and MAPFRE Insurance Company (Florham Park, NJ).

The ratings reflect MAPFRE USA's solid risk-adjusted capitalization, good operating performance and local market expertise. In addition, MAPFRE USA's inter-company pool members provide geographic diversification and rate flexibility to the group.

These positive rating factors are partially offset by MAPFRE USA's concentration of business in Massachusetts, which is focused on private passenger automobile insurance, as well as its susceptibility to weather-related losses, which has been evident in MAPFRE USA's underwriting results over the last several years.

The revised outlook reflects the stabilizing economic condition within Spain, to which MAPFRE USA's ultimate parent organization, MAPFRE S.A. (MAPFRE) (Spain), has material investment and business exposure.

MAPFRE has a strong level of risk-adjusted capitalization and has generated robust overall earnings in recent years, despite extremely challenging economic conditions in its local market. MAPFRE remains heavily exposed to the Spanish economy, with Spanish debt accounting for 40% of the group's EUR 40 billion of invested assets at December 31, 2013. While economic headwinds such as high unemployment and a continued soft housing market persist, Spain is showing early signs of economic recovery. In addition, while Spain's government debt remains elevated, Spanish, and more generally European, financial markets have stabilised over the past year easing the debt burden. Although Spain is a core insurance market for MAPFRE, its operations are well diversified geographically, particularly in the Americas. Furthermore, MAPFRE's Spanish insurance business has been resilient and continues to perform strongly.

Negative rating pressure could occur if there is deterioration in MAPFRE USA's or MAPFRE's risk-adjusted capitalization. Additionally, there could be negative rating pressure if there is further deterioration or volatility in the Spanish economy. Upwards rating movement is most likely to be generated from improving economic conditions within Spain over the longer term.

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

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

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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