PRESS RELEASE

A.M. Best Assigns Credit Ratings to Chubb Perú S.A. Compañía de Seguros y Reaseguros

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Friday, November 9, 2018

Press release from A.M. Best

MEXICO CITY, November 9, 2018-A.M. Best has assigned a Financial Strength Rating of A (Excellent) and a Long-Term Issuer Credit Rating of "a+" to Chubb Perú S.A. Compañía de Seguros y Reaseguros (Chubb Perú) (Lima, Perú). The outlook assigned to these Credit Ratings (ratings) is stable.

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The ratings reflect Chubb Perú's balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Chubb Perú initiated operations in 1998 as Altas Cumbres; in 2007, it was acquired by ACE Group and branded ACE Seguros S.A., until 2016, when its name was changed to Chubb Seguros Perú S.A. following the acquisition of The Chubb Corporation by ACE Limited.

The company has a diversified book of business, distributed through a mix of traditional and massive channels, such as large regional retailers and banks. Currently, its business portfolio is composed of 59% property/casualty, 27% life, and 14% accident and health. As of September 2018, Chubb Perú is the ninth-largest insurance operation in the country, with a market share of 1.8%.

Balance sheet strength is considered very strong, as the company has a defined risk appetite that limits its exposures and protects its solid capital base through adequate investment, reinsurance and underwriting principles. Additionally, the company has in place a comprehensive reinsurance program with its affiliate, Chubb Tempest Reinsurance Ltd.

The company's upward trend in premium growth has not materialized in an upward trend in results, despite underwriting performance being very good, with a combined ratio maintained at below 60%. Claims, mostly related to one-time events, have been addressed adequately through catastrophe reserves and the use of reinsurance contracts to protect net income. September 2018 results reflected a positive trend in net income, driven by an improved loss ratio.

The company benefits from being integrated into the group, gaining operational leverage through the same systems, procedures and ERM practices. The group has demonstrated its support to Chubb Perú by providing a comprehensive reinsurance program with its affiliate and actively overlooking its strategy.

Positive rating actions could take place in the medium term if the company is able to reflect its organic upward premium growth with an upward trend in profitability while maintaining very strong risk-adjusted capitalization. A sharp deterioration in operating performance or a significant weakening of its risk-adjusted capitalization could lead to negative rating actions. The ratings also could be downgraded if A.M. Best determines that Chubb Peru's strategic importance to its group has diminished.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.