Cooperativa de Seguros downgraded after HIM

AM Best has taken several negative rating actions against Cooperativa de Seguros Multiples de Puerto Rico (CSM) following adverse development on losses from Hurricane Maria. The rating agency placed under review with negative implications the financial strength rating (FSR) and Long-Term Issuer Credit Rating (long-term ICR) of CSM and revised both the FSR and long-term ICR of Real Legacy Assurance Company, a wholly owned subsidiary of CSM, to "E" (under regulatory supervision), and “e” respectively. Real Legacy previously had a financial strength rating of "A-", and a long-term issuer credit rating of “A-". The credit rating action taken against CSM is the result of second quarter statutory filings that reported a significant decline in policyholder surplus following losses of roughly $30m from hurricane Maria, which devastated the island last year. According to data from AM Best, Cooperativa Seguros Group, the collective formation of both Real Legacy and CSM, was the third largest homeowner’s insurers and third largest commercial insurer on the island in 2017. The rating agency has stated that claims from hurricane Maria caused Cooperativa Seguros to exceed its available reinsurance capacity, while losses at the subsidiary level also led to sizable capital losses.

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