AM Best Affirms Credit Ratings of Pacífico Compañía de Seguros y Reaseguros S.A.

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" (Excellent) of Pacífico Compañía de Seguros y Reaseguros S.A. (PCS) (Lima, Perú). The outlook of these Credit Ratings (ratings) is stable.

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

The ratings of PCS also reflect the company's strong market share in Perú's insurance industry, as well as its comprehensive and well-diversified reinsurance program.

PCS is Perú's second largest insurer overall with a market share of 24%, as of October 2023. Life insurance composes half of the company's business portfolio, with non-life insurance making up the remaining half. The company's ultimate parent is Perú's largest financial holding company, Credicorp Ltd. [NYSE: BAP], which had over USD 62 billion in assets as of December 2022.

In 2022, PCS improved its risk-adjusted capitalization, which stands at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR); significant positive bottom-line results allowed the company to widen its capital base. PCS continues to benefit from risk mitigation achieved through diversification and a robust and comprehensive reinsurance program with highly rated reinsurers.

PCS has maintained adequate operating performance. During 2022, underwriting adjustments the company made in its sensitive business lines such as life, health and insurance related to pension funds to counter stress derived from the effects of the COVID-19 pandemic materialized in visible improvements, which translated into significant profitable results by year-end 2022, and continue to show a positive trend as of October 2023.

The stable outlooks reflect the improvement of PCS's operating performance, resulting from price adjustments, and points to the capabilities of its management, which have been instrumental in stabilizing the company's capital base.

Positive rating actions could occur if the company sustains improvements in risk-adjusted capitalization or demonstrates a favorable trend in underwriting performance. Negative rating actions may occur if the company experiences an unfavorable trend in underwriting performance, which results in the constant reporting of net losses that impacts the company's risk-adjusted capitalization.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.