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AM Best Downgrades Credit Ratings of INTEGRAND Assurance Company; Maintains Under Review with Negative Implications Status
[March 15, 2019]

AM Best Downgrades Credit Ratings of INTEGRAND Assurance Company; Maintains Under Review with Negative Implications Status


AM Best has downgraded the Financial Strength Rating to C++ (Marginal) from B++ (Good) and the Long-Term Issuer Credit Rating to "b" from "bbb+" of INTEGRAND Assurance Company (INTEGRAND) (San Juan, Puerto Rico). Concurrently, AM Best has maintained the under review with negative implications status for these Credit Ratings (ratings).

The rating downgrades reflect INTEGRAND's balance sheet strength, which AM Best categorizes as weak, as well as its marginal operating performance, very limited business profile and marginal enterprise risk management (ERM).

AM Best views the company's risk-adjusted capitalization as weak based on the continued exposure to disputed reinsurance recoverables, with heightened uncertainty regarding their ultimate resolution. Additionally, these rating actions follows a recent regulatory announcement from the Insurance Commissioner of Puerto Rico, which limits the company from actively writing new business in Puerto Rico, suspending any commission increases and several other activities over the near term

The ratings previously were downgraded and placed under review with negative implications on Nov. 29, 2018, in response to the company's third-quarter statutory statement that reflected a sizable decline in policyholder surplus due to adverse development on losses related to hurricanes Maria and Irma of approximately $15 million. At that time, AM Best revised the assessment of INTEGRAND's ERM to marginal. The assessment downgrade was driven by the size of the additional catastrophe losses relative to amounts previously disclosed to AM Best, which created uncertainty regarding the company's ERM progrm.



As part of these latest rating actions, AM Best has revised its assessment of INTEGRAND's business profile downward to very limited from limited, largely due to the regulatory restrictions under which the company must now operate. Furthermore, INTEGRAND's operating performance assessment also was revised downward to marginal from adequate, driven by weak operating performance over the past few years, as the company's operating return measures trails its peer and industry composites by a sizable margin.

These ratings will remain under review pending AM Best's analysis of the company's business plans.


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 Understanding Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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