AM Best has assigned a Financial Strength Rating of A (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a” (Excellent) to Commercial Re Overseas Limited (CRe) (Road Town, British Virgin Islands). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect CRe’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).

CRe is the captive reinsurer of Banco General, S.A. (BG), one of the largest banks in Panama. The market scope of CRe is limited to accept business from General de Seguros, S.A. (GS), its sister company. GS has a Long-Term ICR of “a” (Excellent) with a stable outlook and is an insurance subsidiary of BG. CRe and BG are ultimately owned by Grupo Financiero BG, S.A. (Panama), a publicly listed company with USD 3.7 billion in equity as of December 2024.

CRe’s business profile is considered neutral to the ratings due to the company being fully integrated into the group’s operations. This interconnection allows CRe to leverage the group’s resources, expertise and technological advances, enhancing operational efficiency. Concerns regarding concentration are mitigated by the fact that the company has served for 30 years as a captive to BG, and the importance of BG to Panama’s financial system.

AM Best assesses CRe’s balance sheet strength at the strongest level due to its ample capital base with a clearly defined risk appetite. Somewhat limiting this assessment is the quality of capital concentrated in retained earnings rather than paid capital; nevertheless, dividend distribution has been prudent, historically.

As of December 2024, the company reported sound underwriting ratios, due to a double screening on the underwriting side (by BG and GS) and to the operational efficiencies related to common processes with BG. The company has presented good profitability and quality of underwriting during the past years, rendering the operating performance strong.

AM Best assesses CRe’s ERM as appropriate, as the company has a clear risk management structure backed by the group’s knowledge and aims to comply with its defined risk appetite according to its tolerances.

The stable outlooks reflect AM Best’s expectation that CRe will continue to develop its strategy in a profitable way, while maintaining its current level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and prudent capital management practices.

Factors that might lead to negative rating actions include any major changes in CRe's capital base, such as significant dividends or capital outflows, which diminish AM Best’s view of the company’s balance sheet strength. Negative rating actions could also take place if there are significant disruptions in business generation tied to its parent company that could impact either revenue or profitability. Although unlikely, positive rating actions could take place as a result of a change in AM Best’s perception regarding the strategic importance of CRe to the group.

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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