AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Compañía Reaseguradora del Ecuador S.A. (Ecua Re) (Ecuador). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Ecua Re’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The stable outlooks are derived from Ecua Re’s capacity to maintain a growing capital base while maintaining a strong and consistent operating performance supported by prudent underwriting and positive investment returns.

Ecua Re was established in 1977 and is the only domestic reinsurer operating in Ecuador. The company provides reinsurance solutions for the country’s domestic insurers. The company’s business portfolio is composed mostly of fire and allied lines, technical risks, life and vehicles. Ecua Re has started an internationalization process that will lead to foreign reinsurer status in selected markets. The company benefits from recent regulatory changes in Ecuador allowing primary insurers to cede personal lines business, which was restricted previously.

Ecua Re’s largest shareholder is Hannover Rück SE (Hannover Re), which has a 30% ownership stake via its wholly owned subsidiary, FUNIS GmbH & Co. KG, with other local leading insurers holding an approximate 70% stake. Ecuador’s economic prospects continue to evolve as the government has refinanced its debt aiming to focus on security, which has driven growth in gross domestic product. In 2026, AM Best will continue to assess the impact of economic developments in Ecuador’s insurance market, as well as new market dynamics that result from new businesses openings, and changes in regulations in the domestic reinsurance space. Partially mitigating AM Best’s concern over Ecuador’s economic environment is Ecua Re’s business profile, which aims to provide profitable geographic diversification, as well as benefiting from its ownership in quality business, while maintaining reinsurance capacity through its main shareholder.

AM Best assesses Ecua Re’s balance sheet strength as strongest, as the company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), reflects its ability to manage risk exposures, supported by a comprehensive reinsurance program led by Hannover Re. Furthermore, Ecua Re gains financial flexibility through an Ecuador law that requires shareholders with a stake higher than 12% to assume additional financial responsibility in the event of insufficient shareholders’ funds. Ecua Re’s capital volume has continued to strengthen despite a substantial amount of dividends paid in relation to net income, reflecting the capacity of the company to generate net results. AM Best considers Ecua Re’s ERM practices to be appropriate, given the company’s comprehensive and appropriate risk framework.

AM Best assesses Ecua Re’s operating performance as strong, given its consistent positive technical performance during the past five years, and its capability to generate revenue from market opportunities in a profitable manner. Additionally, the company’s retrocession profile provides revenue from ceding commissions and mitigates claim costs. Investment income continues to support net results; however, AM Best will continue to monitor market and regulatory changes that could affect the investment results. As of August 2026, the company posted a combined ratio of 81%.

Negative rating actions could take place if Ecua Re’s operating performance deteriorates to levels no longer supportive of its strong assessment either through market developments or changes in underwriting.

Positive rating actions are unlikely in the medium term but could take place if the company successfully diversifies its international revenue while maintaining current levels of operating performance and balance sheet strength.

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.

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