AMSTERDAM, July 28, 2022–(BUSINESS WIRE)–AM Best has confirmed the Financial Strength of A (Excellent) and the Long-Term Offerings of “a+” (Good) for Seguros Catalana Occidente, SA de Seguros y Reaseguros (SCO), Bilbao, Compañía Anónima de Seguros y Reaseguros, SA (SB) and Plus Ultra Seguros Generales y Vida, SA de Seguros y Reaseguros (PU). All three companies are all subsidiaries of Grupo Catalana Occidente SA (GCO), a non-operating company of the GCO group, and are the group’s insurance subsidiaries. These companies are located in Spain. The loan format (parts) is fixed.
SCO’s ratings reflect the strength of its balance sheet, which AM Best considers to be very strong, as well as its strong performance, neutral business history and sound business management. The ratings also reflect the upside from GCO, which sees the importance of the traditional insurance business to the GCO group, as well as the history of financial support and services from GCO. The ratings of PU and SB take into account their importance to SCO and GCO.
SCO’s balance sheet strength is supported by capitalization-adjusted capitalization, which is considered very strong, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects risk-adjusted capital to be maintained at a very strong level, supported by continued generation of internal capital. The company’s strong valuation also benefits from its low leverage, good liquidity and absence of foreign debt. A slightly limiting factor is the lack of flexibility in the financial system itself, as the funds are managed in groups.
SCO has a strong performance history, as evidenced by a five-year average return on investment of 25% (2017-2021), as calculated by AM Best, with appropriate contributions from technology and investment funds. In 2021, the company reported a stable and strong combined ratio of 84% (2020: 82%). Technical acquisitions are supported by the company’s extensive network, which has been in place for several years and allows SCO to manage the writing process more efficiently.
GCO’s traditional insurance businesses operate exclusively in Spain and together they hold a top 10 position in the number of retail businesses in their domestic market. SCO is the leading organization in the traditional insurance business of GCO, accounting for approximately 26% of the total amount written in 2021. SCO, SB and PU together form a strong and diverse franchise that is present in all the regions of Spain and the distribution of the market. way.
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