AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of Chubb Perú S.A. Compañía de Seguros y Reaseguros (Chubb Peru) (Lima, Peru). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Chubb Peru’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The stable outlooks reflect AM Best’s expectation that the company can continue to adjust its product offerings in a profitable manner, supported by its parent company, Chubb Limited.
Chubb Peru initiated operations in 1998 as Altas Cumbres; in 2007, it was acquired by ACE Group and named ACE Seguros S.A., until 2016, when ACE Limited acquired The Chubb Corporation and re-branded the company.
Chubb Peru has a diversified book of business, distributed through a mix of traditional and massive channels, such as large regional retailers and banks. As of December 2022, 71% of the company’s gross written premium was composed of property/casualty products, with accident and health comprising 22% of the portfolio and life insurance the remaining 7%. As of September 2023, Chubb Peru is the 11th largest insurance operation in Peru, with a market share of 1.36%.
AM Best considers Chubb Peru’s balance sheet strength to be very strong, as the company has a defined risk appetite that limits exposures and protects its solid capital base through adequate investment, reinsurance and underwriting principles. Additionally, the company has a comprehensive reinsurance program with its affiliate, Chubb Tempest Reinsurance Ltd. In 2022, Chubb Peru’s risk-adjusted capitalization remained stable due to adjustments in its business offerings, which, despite a dividend payment, continued to support the company’s capital position.
The company’s year-end 2022 results reflect a decrease in claims in contrast to 2021, maintaining expenses at levels similar to the previous year, resulting in a lower combined ratio and an almost 2.5x net income. Chubb Peru’s results through September 2023 remain positive, backed by alignments in strategy to limit exposure to complicated segments, such as surety and credit life.
The company benefits from its integration into the Chubb group, gaining operational advantage through the same systems, procedures and ERM practices. The group has demonstrated its support to Chubb Peru by providing a comprehensive reinsurance program with its affiliate and actively overseeing this strategy.
Positive rating actions could occur if the company maintains its good operating performance results in the medium term. Conversely, the ratings could be downgraded if AM Best determines that the strategic importance of Chubb Peru to its group has diminished.
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