AM Best Affirms Credit Ratings of Compañía Reaseguradora del Ecuador S.A.
MEXICO CITY, October 21, 2026--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" (Excellent) of Compañía Reaseguradora del Ecuador S.A. (Ecua Re) (Ecuador). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Ecua Re's balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The stable outlooks are derived from Ecua Re's capacity to maintain a growing capital base while maintaining a strong and consistent operating performance supported by prudent underwriting and positive investment returns.
Ecua Re was established in 1977 and is the only domestic reinsurer operating in Ecuador. The company provides reinsurance solutions for the country's domestic insurers. The company's business portfolio is composed mostly of fire and allied lines, technical risks, life and vehicles. Ecua Re has started an internationalization process that will lead to foreign reinsurer status in selected markets. The company benefits from recent regulatory changes in Ecuador allowing primary insurers to cede personal lines business, which was restricted previously.
Ecua Re's largest shareholder is Hannover Rück SE (Hannover Re), which has a 30% ownership stake via its wholly owned subsidiary, FUNIS GmbH & Co. KG, with other local leading insurers holding an approximate 70% stake. Ecuador's economic prospects continue to evolve as the government has refinanced its debt aiming to focus on security, which has driven growth in gross domestic product. In 2026, AM Best will continue to assess the impact of economic developments in Ecuador's insurance market, as well as new market dynamics that result from new businesses openings, and changes in regulations in the domestic reinsurance space. Partially mitigating AM Best's concern over Ecuador's economic environment is Ecua Re's business profile, which aims to provide profitable geographic diversification, as well as benefiting from its ownership in quality business, while maintaining reinsurance capacity through its main shareholder.
AM Best assesses Ecua Re's balance sheet strength as strongest, as the company's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), reflects its ability to manage risk exposures, supported by a comprehensive reinsurance program led by Hannover Re. Furthermore, Ecua Re gains financial flexibility through an Ecuador law that requires shareholders with a stake higher than 12% to assume additional financial responsibility in the event of insufficient shareholders' funds. Ecua Re's capital volume has continued to strengthen despite a substantial amount of dividends paid in relation to net income, reflecting the capacity of the company to generate net results. AM Best considers Ecua Re's ERM practices to be appropriate, given the company's comprehensive and appropriate risk framework.