AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of "bbb+" (Good) of Popular Life Re (PLRe) (Puerto Rico). PLRe is a life reinsurance 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 weak credit profile of the ultimate parent, Popular, Inc., continues to have a drag on the ratings lift/drag reflected in PLRe's ratings.

PLRe's balance sheet strength is driven by the continued strongest risk-adjusted capitalization assessment, as measured by Best's Capital Adequacy Ratio (BCAR) over the past few years, and a high-quality level of marketable investments, along with a strong liquidity position. Investment strategy protects interest income, preserves capital and surplus while maximizing investment gains and covering the operating liquidity needs. PLRe remains strategically important to Popular, Inc., although the earnings contribution to the parent company continues to be modest. Additionally, the company reinsures a portion of credit insurance policies on consumer loans that originated at Banco Popular de Puerto Rico, as well as personal accident and health policies underwritten by unaffiliated insurers. PLRe's limited business profile offsets the favorable rating factors. One of the primary attributes of the business is the company's limited geographic profile as it primarily operates in Puerto Rico, which has been impacted negatively by population declines and natural disasters over the past few years.

There also is a heavy reliance on sourcing business through its parent company, Popular, Inc., and its banking relationships. However, a reinsurance treaty with a local insurer, and the introduction of new online offerings of a new guaranteed life insurance product and a personal accident insurance program issued by an existing ceding company, have improved diversification. A project to relaunch the credit life product for personal loans also is underway. These strategies are designed to grow new business and new markets eventually.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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Igor Bass

Senior Financial Analyst

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igor.bass@ambest.com

Kate Steffanelli

Associate Director

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Associate Director, Public Relations

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Al Slavin

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AM Best Affirms Credit Ratings of Popular Life Re