INTEGRAND Assurance Company, the Puerto Rico-based property and casualty (P&C) re/insurer, has been ordered to stop writing new catastrophe business by its regulator.
Subsequently, A.M. Best has downgraded the company’s Financial Strength Rating from B++ (Good) to C++ (Marginal) and its Long-Term Issuer Credit Rating from ‘bbb+’ to ‘b’, while maintaining its negative outlook on these ratings.
The Puerto Rico Insurance Commissioner’s Office (ICO) has prevented INTEGRAND from accepting new business related to cat risks in commercial and personal property insurance, limiting it only to renewals of existing policies and other lines of business.
“As we know, stemming from the impact of hurricanes Irma and María, and with special importance on the part of the governor, Ricardo Rosselló, that the interests of policyholders are safeguarded, our Office has been closely monitoring the financial solvency and operations of the main property and contingency insurers,” said Commissioner Javier Rivera Ríos.
The ICO is concerned that, without corrective action, INTEGRAND’s financial condition could deteriorate to a situation of insolvency or diminished capital.
Similarly, A.M. Best views INTEGRAND’s balance sheet strength as weak, with marginal operating performance, very limited business profile, and marginal enterprise risk management (ERM).
Analysts consider the company’s risk-adjusted capitalisation to be weak based on its continued exposure to disputed reinsurance recoverables, and also factored the ICO’s actions into its ratings.
INTEGRAND’s ratings were previously downgraded and placed under review with negative implications in November 2018, in response to the company’s Q3 statutory statement, which reflected a sizable decline in policyholder surplus due to $15 million of adverse development on losses related to Hurricanes Maria and Irma.
The re/insurer is currently involved in a legal dispute with its reinsurers over claims relating to its 2017 hurricane losses, with counterparties reportedly including Swiss Re America, Everest Re, Odyssey Re and a number of Lloyd’s syndicates.
