AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” (Good) of Popular Life Re (PLRe) (Puerto Rico). PLRe is a life insurance 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 ratings also reflect PLRe’s stable liability profile, strong return metrics and invested assets, which are of excellent credit quality and highly liquid. PLRe’s enterprise risk program has performed well under continued pressure from the pandemic and recent hurricanes and earthquakes, and helped to keep impacts on performance as minor. PLRe remains strategically important to Popular, Inc., although earning contributions to the parent company are modest. Additionally, the company reinsures a portion of credit insurance policies on consumer loans originated at Banco Popular de Puerto Rico, as well as personal accident and health policies underwritten by unaffiliated insurers.

Partially mitigating rating factors include positive premium in the current year, although they are not back to pre-pandemic levels. The prior three years saw declining premium growth trends and geographic concentration risk, as credit life and accident and health business mostly is transacted in Puerto Rico, and challenges associated with difficulties structurally and economically following the natural disasters. However, AM Best notes that PLRe continues to seek opportunities to expand into Latin America, as it grows in the region through its affiliate, Popular Insurance, a Lloyd’s of London managing general underwriter. Although the ratings reflect improvement over the past couple of years in Popular, Inc.’s credit profile, it still factors in ratings drag from continued economic pressures, which are likely to improve in the intermediate term.

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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