AM Best Affirms Credit Ratings of Triple-S Management & Certain Life/Health Subsidiaries; Downgrades Credit Ratings of Triple...
June 03 2020 - 10:54AM
Business Wire
AM Best has affirmed the Financial Strength Rating (FSR)
of B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term
ICR) of “bbb+” of Triple-S Salud, Inc. (TSS) and its affiliate,
Triple-S Vida, Inc. (TSV). AM Best also has affirmed the Long-Term
ICR of “bb+” of the ultimate parent, Triple-S Management
Corporation (TSM) [NYSE: GTS]. The outlook of these Credit Ratings
(ratings) is stable.
Furthermore, AM Best has downgraded the FSR to B+ (Good) from
B++ (Good) and the Long-Term ICR to “bbb-” from “bbb” of Triple-S
Blue, Inc., I.I. (TSB). These outlooks have been revised to
negative from stable. All companies are domiciled in San Juan,
PR.
The ratings of TSS and TSV reflect the group’s aggregate balance
sheet strength, which AM Best categorizes as very strong, as well
as its adequate operating performance, limited business profile and
appropriate enterprise risk management (ERM).
The capital level at TSS has increased over the near term
primarily driven by favorable operating results in 2019 from
premium growth largely attributed to its Medicare Advantage
segment’s membership growth. Its Medicaid segment has also
performed well and attracted more members and higher average
premium rates. TSS manages the largest provider network in Puerto
Rico and markets a broad array of managed care products; however,
operating in a single market, which has been depressed for a
prolonged period of time, exposes the company to some geographic
limitations.
TSM has managed and prioritized its risks to minimize
operational downtime. The company has managed operational risk well
through two major hurricanes and earthquakes affecting the island’s
infrastructure over the past couple of years. More recently, the
organization was able to execute its contingency plans around
business continuity following the COVID-19 pandemic spread. AM Best
notes that the impact to health insurance companies from COVID-19
has been less severe than anticipated. After state and federal
agencies requested the deferral of elective surgeries and routine
care to limit the spread of the virus, health companies have seen a
decline in medical care for non-COVID conditions, which has more
than offset the impact from COVID-19 claims. AM Best acknowledges
the risk management program for TSS and TSV to be appropriate with
a formalized process, containing risk identification, management
and mitigation.
TSV continues to have adequate capital capacity supporting its
life claims experience. Furthermore, TSV has had a conservative
investment portfolio and sustained overall liquidity above 100%
during the past five years. A favorable long-term trend of
operating results coupled with lower loss ratio has added to steady
growth for this company.
The ratings of TSB reflect its balance sheet strength, which AM
Best categorizes as adequate, as well as its marginal operating
performance, limited business profile and appropriate ERM. The
Long-Term ICR downgrade for TSB reflects its unfavorable operating
results, which has led to the decline in its risk-adjusted
capitalization. TSB’s outlook revision to negative is attributed to
deterioration in the company’s operating results, as well as
sustained decline in capitalization to a level that no longer
supported the rating. The balance sheet strength assessment
includes the explicit and implicit support of TSB’s parent company
(TSV) and ultimate parent company (TSM). AM Best expects capital
support from TSV as needed to support the growth of business.
TSB has made investments in its business operations to sustain
additional growth and uses its Blue Cross and Blue Shield
trademarks effectively to garner a share of the medical market in
Costa Rica.
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 media use of Best’s
Credit Ratings and AM Best press releases, please view Guide for
Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in New York, London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20200603005619/en/
Antonietta Iachetta Senior Financial Analyst +1 908 439 2200,
ext. 5792 antonietta.iachetta@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Wayne Kaminski Senior Financial Analyst +1 908
439 2200, ext. 5061 wayne.kaminski@ambest.com
Jim Peavy Director, Public Relations +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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