Operating Company Composite
Av. Periferico Sur # 2771, Col San Jeronimo Lidice, 10200 Mexico, D.F., Mexico
Web: www.PatriaRe.com.mx
Fax: 5255-5681-1883 Tel: 5255-5683-4900
AMB#: 086054
AIIN#: AA-2730800
Report Revision Date: 06/01/2012
Best's Financial Strength Rating: A-
Best's Issuer Credit Rating: a-
Best's Financial Size Category: VIII
Outlook : Stable
Outlook : Stable
Rating Rationale: The ratings reflect Reaseguradora Patria S.A.B.'s (Patria Re) excellent risk-adjusted capitalization, its strong balance sheet, its consistent overall earnings in recent years and management's local and regional market expertise. Offsetting these strengths are Patria Re's elevated expense structure, the concentration of equities in its investment portfolio, and the company's exposure to frequent and severe catastrophic losses.
Patria Re is a reinsurer mainly in the Mexican, Latin American and Caribbean markets and is focused on the prudent management of its underwriting risk in the region. As a result of its comprehensive domestic and regional knowledge, Patria Re has established a strong niche position in Mexico and Latin America, which allows the company to selectively accept profitable business while maintaining a diversified product portfolio tailored to specific markets. The benefit of this approach has been demonstrated in recent years, since despite Patria Re's core operating territories being affected by more frequent and severe catastrophic events, overall earnings continue to be robust and the company has been able to enhance its risk-adjusted capitalization. However, Patria Re's equity holdings represent a significant portion of the company's investment portfolio and expose its investment results to global and regional investment market volatility.
Patria Re's operations are concentrated in catastrophe zones that have experienced increased frequency of catastrophic events in recent years, especially Mexico and the
Caribbean. Since Patria Re is dependent upon retrocession for mitigation of these risks, in addition to surplus and earnings protection, earnings will continue to be impacted by costs associated with its retrocession programs. Also, Patria Re's elevated expense level is driven by acquisition costs associated with its portfolio mix. Furthermore, Patria Re's

risk profile has changed in recent years through its assumption of European and Asian exposure. While this affords Patria Re some additional geographic diversification in its operations, the company continues to accept risk in relatively new markets. A.M. Best will continue to closely monitor Patria Re's experience with these treaties for any adverse developments.
While the ratings are stable, factors that could contribute to rating enhancement include continued improvement in underwriting performance, consistent long-term overall profitability and an upgrade in Mexico's country risk tier rating.
Factors that may lead to negative rating actions include sustained decline in underwriting profitability, significant deterioration in risk-adjusted capitalization as measured by A.M.
Best's capital model and a downgrade in Mexico's country risk tier rating.
Date
05/29/12
05/31/11
05/27/10
06/02/09
02/05/08
FSR
BEST'S
ICR
A-
A- a- a-
A-
A-
A- a- a- a-
Reaseguradora Patria, S. A. B. (Patria Re) is a publicly traded company listed on the
Mexican Stock Exchange and provides life, surety and property casualty reinsurance mainly in Mexico, Central and South America and the Caribbean. In recent years, Patria
Re has emerged as Mexico's largest private reinsurer.
As measured by gross premiums, domestic reinsurance comprises 38% of its business,
Latin America represents 47%, the Caribbean accounts for 7%, with its growing overseas operations accounting for the remaining 8%. Patria Re writes mostly short-tailed business with its main business segments as measured by gross premiums as follows: catastrophe
& earthquake 24%, property 23%, surety 17%, group & collective life 12%, automobile
5% and marine & aviation 4%. All other segments including accident & health and liability accounts for the remaining 15%.
Patria Re has comprehensive treaty and facultative retrocession programs in place which may be both proportional and non-proportional depending on the business segment. Net business retention in 2011 was 90%. Patria Re maintains a prudent retrocession program

with capacity provided by high quality global reinsurers such as Hannover Re, and several Lloyd's syndicates among others.
Patria Re's total coverage under the property catastrophe program is USD 56 million in excess of USD 4 million for a hurricane event and USD 58 million in excess of USD 2 million for earthquake cover. This program has 4 layers with 2 reinstatements on all layers. In addition, the company maintains "whole account" excess of loss protection in 4 layers with total coverage of USD 35 million in excess of USD 5 million. The whole account protection allows one reinstatement for each layer.
Gross capacity to write business is as follows: aviation USD 6 million in Mexico; fire
USD 9 million in Mexico, USD 8 million in foreign markets; technical risk USD 5 million for both Mexico and foreign markets; life USD 3.6 million; personal accident
USD 250 thousand: surety USD 10 million for Mexico, USD 7 million for Colombia and
USD 5 million for rest of Latin America; third party liability USD 2 million and USD 2 million for cargo. Patria Re's gross retention is as follows: aviation USD 1.8 million; fire
USD 8 million, technical risk USD 2.5 million; life USD 300 thousand; personal accident
USD 250 thousand; surety USD 5 million; third party liability USD 2 million, cargo USD
2 million, motor USD 500 thousand and other risks USD 100 thousand.
Operating Results: Patria Re's operations had been profitable until 2008 when it reported an overall net loss. 2008 overall results were impacted by substantial unrealized losses associated with the equity component of the company's investment portfolio. Patria
Re returned to overall profitability in 2009 with substantial unrealized gains in its investment portfolio reversing the prior year unrealized losses. Underwriting trends have been favorable in recent years with combined ratios below 100% despite increasing frequency of catastrophic events in the company's operating territories. Patria Re's favorable loss experience is attributable to its strict underwriting and prudent risk management. The company recorded solid overall earnings in 2011 driven by its property
(non-cat) segment along with its automobile and casualty segments. Given the concentration in equity holdings as a component of Patria Re's investment portfolio, the impact of domestic and global equity market volatility on investment income and earnings remain a concern.
Investment Results: Invested assets continue to grow with investment income providing a steady contribution to earnings in recent years, with the exception of 2008 when the volatility and unpredictability in the investment markets resulted in substantial unrealized losses being recognized in Patria Re's financial statements. The unrealized losses were mainly associated with the equity component of its investment portfolio. Given the concentration in equity holdings as a component of Patria Re's investment portfolio, the potential negative impact on overall earnings of the continuing uncertainty and volatility in domestic and global investment markets remain a concern. Fixed income and cash and short term instruments comprise 57% of the company's investment portfolio. Equity holdings and real estate represent approximately 38% and 4% respectively of total

investments. Although equities represent a substantial portion of the investment portfolio, total investments are more than 3 times the company's reserves, so a significant portion of the equity portfolio does not support reserves.
Capitalization: Patria Re maintains excellent risk-adjusted capitalization for its current business profile when measured by its Best's Capital Adequacy Ratio (BCAR). In recent years, internally generated funds have enabled the company to consistently enhance its capitalization, despite the unrealized losses in 2008 that were associated with the equity component of its investment portfolio. Patria Re's underwriting leverage, as measured by the ratio of net premiums written to adjusted surplus, has been fairly steady recently and remains conservative. Capitalization is also supported by a comprehensive retrocession program aimed at minimizing the company's exposure to losses from catastrophic events.
Loss Reserves: Patria Re's loss reserves are reviewed by an independent actuary and are approved by the National Insurance and Surety Commission (Spanish acronym CNSF).
In Mexico all technical reserves, are mandated by statutory margins. The company continues to adhere to its conservative reserving philosophy at levels above statutory requirements. IBNR is recognized as a separate reserve under Mexican regulatory statutes.
Data reflected within all tables of this report has been compiled from the financial statements of this company (Source: Company Financial Statement).
Combined technical account:
Reinsurance premiums assumed
Gross premiums written
Reinsurance ceded
Net premiums written
Increase/(decrease) in gross unearned premiums
Net premiums earned
Total revenue
12/31/2011
MXP(000)
1,552,584
1,552,584
161,005
1,391,579
51,863
1,339,716
1,339,716
12/31/2011
USD(000)
111,103
111,103
11,522
99,581
3,711
95,870
95,870

Net claims paid
Net claims incurred
Management expenses
Acquisition expenses
Net operating expenses
Total underwriting expenses
Balance on combined technical account
Non-technical account:
Net investment income
Realised capital gains/(losses)
Unrealised capital gains/(losses)
Exchange gains/(losses)
Profit/(loss) before tax
Taxation
Profit/(loss) after tax
Increase/(decrease) in the equalisation provision
Retained Profit/(loss) for the financial year
643,174
643,174
93,601
513,785
607,386
1,250,560
89,156
146,371
10,243
67,347
22,953
336,070
-4,987
341,057
213,843
127,214
Capital & surplus brought forward
Profit or loss for the year
Capital gains or (losses)
Dividend to shareholders
Total change in capital & surplus
Capital & surplus carried forward
12/31/2011
MXP(000)
1,221,822
127,214
9,605
-10,000
126,819
1,348,641
12/31/2011
USD(000)
87,434
9,103
687
-716
9,075
96,509
12/31/2011 12/31/2011 12/31/2011
46,026
46,026
6,698
36,766
43,465
89,490
6,380
10,474
733
4,819
1,643
24,049
-357
24,406
15,303
9,103

Cash & deposits with credit institutions
Bonds & other fixed interest securities
Shares & other variable interest instruments
Liquid assets
Real Estate
Other investments
Total investments
Reinsurers' share of technical reserves - unearned premiums
Reinsurers' share of technical reserves - claims
Total reinsurers share of technical reserves
Deposits with ceding companies
Insurance/reinsurance debtors
Other debtors
Total debtors
Fixed assets
Other assets
Total assets
Capital
Uncalled capital
Paid-up capital
Non-distributable reserves
Claims equalisation reserve
Other reserves
Retained earnings
Current year net income
Capital & surplus
Gross provision for unearned premiums
12/31/2011
MXP(000)
1,414,478
526,317
888,161
55,748
1,541,395
23,882
253,636
127,214
2,890,036
354,380
MXP(000)
55,185
3,153,774
700,388
3,909,347
154,587
107,620
4,171,554
38,184
140,101
178,285
129,500
264,262
239,480
503,742
4,628
124,110
5,111,819
12/31/2011
% of total
27.7
10.3
17.4
1.1
30.2
0.5
5.0
2.5
56.5
6.9
2.7
3.5
2.5
5.2
4.7
9.9
0.1
2.4
100.0
% of total
1.1
61.7
13.7
76.5
3.0
2.1
81.6
0.7
12/31/2011
USD(000)
101,220
37,663
63,557
3,989
110,302
1,709
18,150
9,103
206,811
25,359
USD(000)
3,949
225,684
50,120
279,753
11,062
7,701
298,516
2,732
10,026
12,758
9,267
18,911
17,137
36,048
331
8,881
365,802

Gross provision for outstanding claims
Gross provision for long term business - life
Total gross technical reserves
Deposits received from reinsurers
Insurance/reinsurance creditors
Other creditors
Total creditors
Accruals & deferred income
Other liabilities
Total liabilities & surplus
994,122
302,380
1,650,882
123
77,595
91,643
169,238
327,609
73,931
5,111,819
3.3
6.4
1.4
100.0
19.4
5.9
32.3
0.0
1.5
1.8
Reaseguradora Patria, S.A.B. was founded in the United States of Mexico on May 7,
1953 by Storebrand Insurance Company (Norway) and Mexican Investors to write property/casualty reinsurance. In 1954 Reaseguradora Patria, S.A.B. was already operating outside of Mexico, in other Latin American countries and showed very good results, which allowed the company through a capitalization policy, to strengthen its equity. Furthermore, thanks to its presence in these markets the company improved its operating results. Favored by the economic and political conditions in Mexico in the decade of the 60s and aided by a stable monetary environment, Reaseguradora Patria,
S.A.B. extended its operations to England, Continental Europe, Asia, Africa and the
United States, which gave the company international prestige. In 1970, the company was authorized to write a life portfolio. At the end of that decade the Board of Directors, recommended the gradual withdrawal from the United States and overseas markets, due to poor operating results and the devaluation of the Mexican peso. After these events, the company concentrated in writing profitable business in order to increase capital, retention and penetration, in Latin America and the Caribbean. In 1991, Storebrand withdrew from the company and sold its share to the Mexican investors. In 2010 Patria started writing overseas business (Excl. USA) on a limited basis in order to diversify their geographical and sovereign exposure. The company today writes business mainly in Mexico, the
Caribbean, Central and South America.
In 1998, Reaseguradora Patria, S.A.B. bought Reaseguradora Delta, C. A. (Delta) in
Venezuela and through this transaction the company formed a partnership with SCOR, who held 25% of Delta´s shares. Reaseguradora Delta, C. A. was sold to Venezuelan investors in October 2006 and is no longer related to Patria.
At the latest year end, paid in capital amounted to MXP 500,000,000 (nominal value) and was comprised of 200,000,000 common voting shares of no par value.
71,139
21,638
118,137
9
5,553
6,558
12,111
23,444
5,291
365,802

CEO : Manuel S. Escobedo Conover
COO : Ingrid Carlou
Chief Underwriting Officer : Jose Manuel
Rojo (Property)
Chief Compliance Officer : Roberto
Pedraza
Chief Risk Officer : Masashi Kikuchi
Carlos Cardenas
Guzman
Karl Frei Buechi
Raymundo Gerardo
Isla del Campo
Carlos A. Luttman
Fox
Manuel Fernando
Almenara
Camino
Jose Antonio
Cerro Castiglione
Miguel S. Escobedo
Fulda (President)
Jose G. Padilla
Lozano
Beatriz Escobedo
Conover
(Secretary)
Rogelio Ramirez de la O
Antonio Souza
Saldivar
The company is authorized to conduct business in Mexico and in any other country without restriction. In 2011, Mexico was the source of 38% of the company's gross premium with the balance being generated in other Latin American countries, the
Caribbean and Europe.
Liquid assets
Total investments
Total assets
Total gross technical reserves
Net technical reserves
Total liabilities
MXP
(000)
MXP
(000)
MXP
(000)
MXP
(000)
MXP
(000)
2011 2010 2009 2008 2007
3,909,347 3,344,537 3,003,532 2,483,914 2,344,315
4,171,554 3,574,840 3,260,786 2,655,536 2,504,839
5,111,819 4,451,978 3,983,451 3,365,233 3,023,230
1,650,882 1,450,823 1,288,642 1,313,511 971,081
1,472,597 1,279,645 1,094,803 1,035,772 745,389
2,221,783 2,022,011 1,753,607 1,648,919 1,359,705

Capital & surplus 2,890,036 2,429,967 2,229,844 1,716,314 1,663,525
Gross premiums written
Net premiums written
Balance on technical account(s)
Profit/(loss) before tax
Profit/(loss) after tax
MXP
(000)
MXP
(000)
MXP
(000)
MXP
(000)
MXP
(000)
2011 2010 2009 2008 2007
1,552,584 1,463,227 1,561,500 1,089,485 994,062
1,391,579 1,297,131 1,261,346 895,388 792,550
89,156 26,601 655,439 -127,609 172,419
336,070 281,731 655,439 -106,796 157,887
341,057 241,252 518,521 -34,133 129,919
Total debtors to total assets
Liquid assets to net technical reserves
Liquid assets to total liabilities
Total investments to total liabilities
2011
9.9
265.5
176.0
187.8
2010
11.1
261.4
165.4
176.8
2009
8.8
274.3
171.3
185.9
2008
8.6
239.8
150.6
161.0
2007
5.9
314.5
172.4
184.2
Net premiums written to capital & surplus
Net technical reserves to capital & surplus
Gross premiums written to capital & surplus
Gross technical reserves to capital & surplus
Total debtors to capital & surplus
Total liabilities to capital & surplus
2011
48.2
51.0
53.7
57.1
17.4
76.9
2010
53.4
52.7
60.2
59.7
20.3
83.2
2009
56.6
49.1
70.0
57.8
15.8
78.6
Return on net premiums written
Return on total assets
Return on capital & surplus
2011
24.5
7.1
12.8
2010
18.6
5.7
10.4
2009
41.1
14.1
26.3
2008
-3.8
-1.1
-2.0
2008
52.2
60.3
63.5
76.5
16.8
96.1
2007
16.4
4.5
8.3
2007
47.6
44.8
59.8
58.4
10.7
81.7