A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and issuer credit ratings (ICR) of “bbb+” of Triple-S Salud, Inc. (TSS) and Triple-S Vida, Inc. (TSV). Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and the ICR of “a” of Triple-S Propiedad (TSP). Additionally, A.M. Best has withdrawn the debt rating of “bbb” on $50 million 6.30% senior unsecured notes due 2019 of TSS. A.M. Best also has affirmed the ICR of “bb+” of the holding company, Triple-S Management Corporation (TSM) (NYSE: GTS). The outlook for all ratings is stable. All companies are domiciled in San Juan, PR.
The lead operating company’s, TSS, favorable earnings trend over the last five years served to strengthen the organization's level of capitalization, expanding its operating capacity and funding infrastructure upgrades while playing a key role in business acquisitions and provider network development strategies. Offsetting factors include a difficult economic business environment, ability of the company to sustain commercial membership and challenges in the public health insurance marketplace. Recently, TSS again recommitted to the Puerto Rico Medicaid (Health Reform) insurance market but has significantly lowered its risk exposure by limiting its focus to the administrative service only (ASO) side of the business. The organization's ongoing business acquisition strategy also led to approximately 40,000 new Medicare members in early 2011 due to the acquisition of American Health Inc. TSS remains the largest managed care insurer in Puerto Rico. TSS also repaid $50.0 million in outstanding senior unsecured notes. The unsecured obligation carried an interest rate of 6.3% and was scheduled to mature in 2019. Consequently, A.M. Best has withdrawn its rating.
The ratings of TSV recognize its role as a core subsidiary of TSM, its strong market position with a broad range of complementary insurance products and its profitable operations. TSV is the leader distributor of life and cancer products in the Puerto Rico market through its home service, ordinary life and cancer distribution channels. It has no competition in the home service market due to the high entrance and delivery costs. The Triple-S brand has served the organization well, building gradual, sequential revenue development and providing a platform for the introduction of new products and services. The company has increased its capital balance for each of the past five years, expanding its operating capacity.