AM Best Affirms Credit Ratings of Mercantil Reaseguradora Internacional, S.A.

OCTOBER 30, 2025 11:45 AM (EDT)

AM Best Affirms Credit Ratings of Mercantil Reaseguradora Internacional, S.A.

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FOR IMMEDIATE RELEASE

MEXICO CITY - OCTOBER 30, 2025 11:45 AM (EDT)AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of "bbb" (Good) of Mercantil Reaseguradora Internacional, S.A. (Mercantil Re) (Panama). The outlook of these Credit Ratings (ratings) is stable. The ratings reflect Mercantil Re'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 (ERM). The stable outlooks reflect Mercantil Re's capacity to maintain profitable metrics that strengthen and protect its capital base. Mercantil Re is the wholly owned reinsurer of Mercantil Seguros y Reaseguros, S.A., part of the Mercantil group's international companies controlled by the ultimate parent, Mercantil Servicios Financieros Internacional, S.A. (MSFI), which provides synergies and operating efficiencies. The company's main purpose is supporting the group's regional expansion throughout Latin America. Mercantil Re's balance sheet strength is underpinned by its strongest level of risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), and is supported by a well-structured reinsurance program placed with highly rated retrocessionaries, as well as a conservative investment strategy aimed at providing liquidity and maintaining appropriate asset-liability management. Additionally, the company's ERM framework is considered appropriate, as it benefits from the group's guidelines and expertise.Mercantil Re's operating performance is assessed as adequate as it has remained profitable since 2020 through positive technical results and investment income. AM Best expects the company to maintain a profitable operating performance, based on its management's track record in underwriting results, a diversified reinsurance structure and new business origination. Factors that could lead to negative rating actions include the deterioration of either the group's revenue or financial leverage at MSFI, hindering the group's ability to service its debts, and putting pressure on the financial strength of the insurance entities. Adverse underwriting performance that leads to a significant deterioration in Mercantil Re' risk-adjusted capitalization also could drive negative rating actions. While unlikely in the medium term, a factor that could result in positive rating actions is improvement in the credit profile of the group, as a result of sustained profitability strengthening the group's capital base. The methodology used in determining these ratings is Best's Credit Rating Methodology (Version Aug. 29, 2024), which provides a comprehensive explanation of AM Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at https://www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

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• Evaluating Country Risk (Version June 6, 2024)
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• Understanding Global BCAR (Version Sept. 18, 2025)
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• Catastrophe Analysis in AM Best Ratings (Version Feb. 8, 2024)
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• Available Capital and Insurance Holding Company Analysis (Version Sept. 18, 2025)
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• Scoring and Assessing Innovation (Version Feb. 20, 2025)
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View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best's Credit Ratings.

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• Previous Rating Date: Nov. 8, 2024
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• Initial Rating Date: July 17, 2019
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• Date Range of Financial Data Used: Dec. 31, 2019-June 30, 2025
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Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

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