AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Popular Life Re (PLRe) (Puerto Rico). PLRe is a life reinsurance subsidiary of its ultimate parent, Popular, Inc. [NASDAQ: BPOP], a publicly traded bank holding company based in Puerto Rico. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect PLRe’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The weak credit profile of ultimate parent, Popular, Inc., continues to have a drag on the ratings lift/drag reflected in PLRe’s ratings.

PLRe’s balance sheet strength is driven by the strongest assessment, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as a high quality and highly marketable investment portfolio, which lends to a strong liquidity position. PLRe remains strategically important to Popular, Inc., although the earnings contribution to the parent company is modest. Additionally, the company reinsures a portion of credit insurance policies on consumer loans that originated at Banco Popular de Puerto Rico, as well as personal accident and health policies underwritten by unaffiliated insurers.

The company’s limited business profile offsets the favorable rating factors. One of the primary attributes of the business is the company’s limited geographic profile as it primarily operates in Puerto Rico. There also is a heavy reliance on sourcing business through its parent company, Popular, Inc., and its banking relationships. In 2023, PLRe’s business profile expanded through a new reinsurance treaty with a local insurer, and the company has introduced new online offerings of a new guaranteed life insurance product and a personal accident insurance program, both issued by an existing ceding company. These are strategies designed to grow new business.

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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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