AM Best Information Services

NOVEMBER 06, 2019 10:56 AM (EST)

AM Best Affirms Credit Ratings of Atradius Seguros de Crédito, S.A.

 Salvador Smith
Financial Analyst
+52 55 1102 2720, ext. 109

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


MEXICO CITY - NOVEMBER 06, 2019 10:56 AM (EST)
AM Best has affirmed the Financial Strength Rating of A (Excellent), the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” and the Mexico National Scale Rating of “aaa.MX” of Atradius Seguros de Crédito, S.A. (Atradius Mexico) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

Atradius Mexico is a member of the Atradius group, which on a consolidated basis has a balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The ratings also reflect Atradius Mexico’s strategic importance to the overall Atradius group, given its leading position within the credit insurance segment in Mexico, its importance as a gateway to Latin America’s market, good financial flexibility derived from its strong capitalization, supportive reinsurance provided by the group and its seasoned management team. These positive rating factors are offset partially by volatility in the company’s net income due to the intrinsic volatility in the credit insurance market.

The company benefits from its integration within the Atradius group, which allows it to leverage operations on the same practices and procedures, reinsurance, draft facilities and underwriting selection. In addition, its ERM practices show a high level of integration to Atradius N.V.

Atradius Mexico offers credit insurance in its domestic market and was ranked as Mexico’s largest credit insurer as of December 2018. The three largest participants in this line of business hold more than 94.7% of the market share.

Atradius Mexico’s financial performance compares favorably with that of its peers in Mexico’s credit insurance industry, as historically reflected by better-than-average loss ratios due to its underwriting and collection practices. However, as of 2018, the company´s bottom line was pressured mainly by an unrealized capital loss driven by Atradius Mexico´s exposure to an Exchange Traded Fund tracking the Mexico Stock Exchange, which ultimately resulted in a material investment loss. AM Best expects Atradius Mexico’s current profitability to continue to rely mainly on its sound underwriting and expense control practices, as well as its high amount of commissions received by reinsurance, which translate into negative acquisition costs.

Atradius Mexico’s capitalization, as measured on a consolidated basis, was maintained at the strongest level, and as a result, the company maintains significant financial flexibility. Furthermore, AM Best expects the company to sustain its capitalization level. Atradius Mexico’s reinsurance program is placed with Atradius Reinsurance Designated Activity Company, further demonstrating the support received by the group.

If there are positive rating actions on the main operating subsidiaries of Atradius N.V., as a result of a change in the key rating fundamentals of Atradius N.V.’s parent company, Grupo Catalana Occidente, S.A., the ratings of Atradius Mexico likely would move in tandem. Likewise, if there are negative rating actions on the Atradius group, as a result of a sustained decline in operating performance or a sustained deterioration in Atradius N.V.’s consolidated risk-adjusted capitalization, the ratings of Atradius Mexico would mirror those same actions.

A change in AM Best’s perception regarding the actual or perceived level of strategic importance of Atradius Mexico to the Atradius group of companies could impact the company’s ratings.

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

Key insurance criteria reports utilized:

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

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

  • Understanding Universal BCAR (Version May 23, 2019)

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

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

  • Rating Surety Companies (Version Oct. 13, 2017)

  • Understanding BCAR for U.S. Property/Casualty Insurers (Version May 9, 2019)

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: Oct. 19, 2018

  • Date Range of Financial Data Used: Dec. 31, 2013- Sept. 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.

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