Standard & Poor’s Ratings Services announced that it has assigned its “A-” counterparty credit and financial strength ratings to Purto Rico-based Universal Insurance Co. with a stable outlook.
“The rating is based on the company’s strong competitive position and capitalization, good operating performance, and solid operating efficiencies,” stated S&P credit analyst Tom E. Thun. “Although the company has been a successful and leading player in the Puerto Rican personal and commercial market, its concentration in that market, which has performed well, does limit its financial strength.”
S&P also said it “expects that Universal Insurance’s competitive position will remain strong and that earnings will remain good. Overall growth by expansion into the U.S. domestic market and increased product diversification will continue to improve diversification and increase catastrophe exposure.”
The bulletin added that S&P “expects the company’s capitalization to remain strong and its reinsurance program to provide a more-than-adequate cushion from catastrophic events. Firmly established in the Puerto Rican market, the company maintains a strong though concentrated market position. In the context of market size and measured by direct premiums written, the company ranks among the largest domiciled companies in Puerto Rico.”
However, S&P indicated that it “views the company’s geographic concentration in Puerto Rico as a limiting factor to its business position because of added risks stemming from economic, regulatory, and catastrophic events.”
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