The ratings of TSP reflect its excellent capitalization, solid operating profitability that has historically benefitted from favorable reserve development, and well established market presence within Puerto Rico. Partially offsetting these positive rating factors are the company's geographic risk concentration, competitive operating environment and above average underwriting expense ratio relative to the commercial property composite.Factors that could result in upward movement of assigned ratings of TSS and TSV include sustained improvement in balance sheet quality with respect to receivables; increases in the absolute level of capital and surplus; persistent and profitable membership development trend; and continuing efforts of business diversification. A.M. Best believes that the Triple-S organization is well positioned at its current ratings. However, factors that could result in downward movement include revenue and cash flow contraction; intensified product concentration risk; reduced operating results; further deterioration in Puerto Rico’s economy; and challenges surrounding business integration. For TSP, factors that could result in upward movement of the assigned ratings include an improvement in operating earnings and resulting return on revenue measures, which can be sustained over a period of time. Accordingly, this would enhance the company’s ability to generate additional organic surplus growth while strengthening overall capitalization. A.M. Best believes that TSP is well positioned at its current ratings. However, factors that could result in downward rating movement over the near term include weakened operating earnings due to deteriorating underwriting performance or a material increase in catastrophe losses, which could weaken overall capitalization. The principal methodologies used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition , which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Rating Health Insurance Companies”; “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Life/Health Insurers”; Rating Members of Insurance Groups”; and “A.M. Best’s Ratings & the Treatment of Debt.” Methodologies can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2011 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.