Press Release - SEPTEMBER 05, 2019

AM Best Affirms Credit Ratings of Seguros Inbursa, S.A. Grupo Financiero Inbursa


CONTACTS:
 Olga Rubo, FRM
Financial Analyst
+52 55 1102 2720, ext. 134
olga.rubo@ambest.com

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - SEPTEMBER 05, 2019
AM Best has affirmed the Financial Strength Rating of A (Excellent), the Long-Term Issuer Credit Rating of “a+” and the Mexico National Scale Rating (NSR) of “aaa.MX” of Seguros Inbursa, S.A. Grupo Financiero Inbursa (Seguros Inbursa) (Mexico). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Seguros Inbursa’s balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

Seguros Inbursa’s balance sheet strength is underpinned by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The ratings also reflect its strong operating performance, driven by consistent profitability mainly supported by a stable flow of investment income, as well as low underwriting leverage, a diversified business profile and the company’s affiliation with Grupo Financiero Inbursa S.A.B. de C.V. (Grupo Financiero Inbursa), one of the largest financial groups in Mexico.

Seguros Inbursa underwrites life and non-life business, and remains one of the largest and most profitable domestic insurance companies in Mexico. In 2018, individual life and earthquake insurance were among the company’s most profitable business lines, currently representing 19.1% and 9% of gross written premiums, respectively. The company has shown disciplined underwriting in a highly competitive market, consistently reporting overall premium sufficiency levels that compare positively with its closest competitors. This discipline also is reflected in its stable combined ratios, maintained at levels close to 95%, with little volatility in its components. In addition, investment results continue to be the main source of profitability for the company.

Historically, Seguros Inbursa has operated with low underwriting leverage. The company’s risk-based capitalization remains fully supportive of its current ratings. Adjusted capital has grown at a compound annual growth rate of 8.9% during the past five years, and AM Best expects this trend to continue as a result of sound underwriting, conservative reserving and prudent dividend and investment policies, as well as an effective cost containment strategy. Furthermore, Seguros Inbursa continues to benefit from significant operating efficiencies afforded by Grupo Financiero Inbursa’s vast financial and system networks.

Partially offsetting these positive rating factors is the strong competitive environment in Mexico’s insurance market, which AM Best believes could pressure the company’s profitability and market share.

Key rating drivers that could lead to positive rating actions for Seguros Inbursa include continued favorable trends in profitability and capital growth. Conversely, sharp deterioration in underwriting results or a significant weakening of its risk-adjusted capitalization, as measured by BCAR, could trigger negative rating actions.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, 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 www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:


  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Universal BCAR (Version May 23, 2019)

  • Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017)

  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

  • AM Best’s Ratings On a National Scale (Version Oct. 13, 2017)

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, please refer to Understanding Best’s Credit Ratings.


  • Previous Rating Date: Sept. 12, 2018

  • Date Range of Financial Data Used: Dec. 31, 2014-June 30, 2019

This press release relates to rating(s) that have been published on AM Best’s website. For additional 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.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.


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