A.M. Best has changed the credit ratings of Puerto Rico-based P&C re/insurer, INTEGRAND Assurance Company, following a recent court decision that placed the firm under regulatory supervision primarily as a result of Hurricane Maria loss development.
In response to the regulatory action, A.M. Best has removed from under review with negative implications and changed the Financial Strength Rating to a Non-Rating Designation of E (Under Regulatory Supervision) from C++ (Marginal) and the Long-Term Credit Rating to “e” from “b” of INTEGRAND.
The main reason the re/insurer has been placed under regulatory supervision is sizeable loss development on Hurricane Maria losses that exhausted the reinsurance protection it had in place. In the second-half of last year and into 2019, Maria losses developed significantly.
In its Q3 2018 results, the firm noted a decline in policyholder surplus due to $15 million of adverse development on losses related to Hurricanes Maria and Irma, which led to a ratings downgrade by A.M. Best.
Following this, the Puerto Rico Insurance Commissioner’s Office (ICO) prevented INTEGRAND from accepting new business related to catastrophe risks in both commercial and personal property insurance.
In its most recent rating action, A.M. Best notes that INTEGRAND still has exposure to disputed reinsurance recoverables, “with heightened uncertainty regarding the ultimate solution.”
Reportedly, the insurer and reinsurer is still in a legal dispute with its reinsurers over claims relating to its 2017 hurricane losses.
