AM Best has revised the outlook to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Reaseguradora Delta, S.A. (Delta Panama) (Panama City, Panama) and Reaseguradora Delta, C.A. (Delta Venezuela) (Caracas, Venezuela).

The Credit Ratings (ratings) of Delta Panama reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The positive outlook for Delta Panama points to its ability to maintain favorable underwriting metrics and profitable results in the medium and long term, while implementing a growth strategy.

Delta Panama’s very strong balance sheet strength assessment recognizes the company’s adequately matched obligations and risk appetite, as well as its shareholders’ commitment to strengthening the company’s capital base, reflected in its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and favorable net underwriting leverage metrics.

The company’s operating performance is characterized as profitable; positive bottom-line results were achieved in all business lines during 2023. While investment income contributes to Delta Panama’s earnings, profitability is fully achieved through technical results. AM Best expects Delta Panama to maintain sufficient premium levels while implementing its growth strategy.

Founded in Panama in 2010, Delta Panama offers treaty and facultative reinsurance for several lines of business, including fire, surety, construction and engineering, auto, marine aviation and transport, personal liabilities, robbery and personal accidents. Most of its portfolio is composed of treaty contracts ( 93%), while facultative reinsurance accounts for 7%. Delta Panama is diversified geographically, as the company underwrites business in Ecuador, Panama, Dominican Republic and Paraguay, and is entering new territories such as Mexico, Guatemala and Honduras. The company’s distribution channels include brokers and alliances with other reinsurers, as well as a managing general agent established in Miami by Delta Panama’s shareholders. AM Best assesses the company’s business profile as neutral.

Delta Panama’s ERM is considered appropriate, as it is well-integrated into its operations; risk appetite and tolerance are well-defined, and the company takes advantage of its pricing model and management team, which has over 20 years of experience in the Latin America market. The company has a sound excess of loss retrocession program in place with highly rated reinsurers that have an excellent level of security.

Delta Venezuela is a reinsurance company founded in Caracas, Venezuela, in 1963. The company has shared top management and major shareholders with Delta Panama since 2010; it offers treaty and facultative reinsurance for several lines of business, including fire, surety, construction and engineering, auto, marine aviation and transport, personal liabilities, robbery and personal accidents. The company underwrites premiums in Venezuela and Ecuador through shared distribution channels.

Delta Venezuela’s risk-adjusted capitalization stands at the strongest level, as measured by BCAR, and the company is well-protected against the economic volatility present in Venezuela through its conservative investment strategy. The company’s operating performance is characterized as being profitable; positive bottom-line results have been achieved through technical results in all lines of business during 2023. Delta Venezuela receives substantial reinsurance support in terms of underwriting, reinsurance protection and ERM from Delta Panama, through a comprehensive 90%-10% quota share contract.

Positive rating actions could take place if Delta Panama is able to demonstrate sustained profitable operating results that compare favorably with a strong assessment level. Negative rating actions could occur if the company's capital base erodes due to cash withdrawals or a deterioration in operating results that would debilitate risk-adjusted capitalization to a point no longer supportive of the current assessment.

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