FEBRUARY 13, 2020 03:27 PM (EST)

AM Best Affirms Credit Ratings of Grupo Mexicano de Seguros, S.A. de C.V.

 Inger Rodriguez
Associate Financial Analyst
+52 55 1102 2720 ext. 108

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 - FEBRUARY 13, 2020 03:27 PM (EST)
AM Best has affirmed the Financial Strength Rating of B++ (Good), the Long-Term Issuer Credit Rating of “bbb+” and the Mexico National Scale Rating of “aa+.MX” of Grupo Mexicano de Seguros, S.A. de C.V. (GMX) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) remains stable.

These ratings reflect GMX’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings also reflect GMX’s improved underwriting practices, a reinsurance program placed with counterparties that have strong levels of security and GMX’s well-planned business strategy. In addition, these ratings also consider GMX’s affiliation with its immediate parent, GMS Valore, S.A. de C.V. (formerly Grupo Maxasem), which provides GMX with synergies and operating efficiencies as a member of this group. Offsetting these positive rating factors is the strong competitive environment GMX experiences in its main business lines, which could pressure future underwriting performance.

The company initiated operations in Mexico City in 1998. GMX underwrites property/casualty insurance and ranked ninth in this segment, with 3.9% market share as of September 2019, based on direct premiums written. The company’s main business line is personal liability, and it operates mainly through a network of independent agents and promoters, as well as online sales.

GMX’s overall underwriting results have improved significantly from prior years, as its combined ratio has remained below the 100% threshold since 2015. During 2018, the company improved its underwriting results and increased retention, and when coupled with lower claims and stable management expenses, enhanced overall profitability. As of September 2019, the company maintained adequate underwriting performance and investment yields, and recorded positive bottom-line results.

GMX’s management team has a solid track record in terms of implementing strategies and taking advantage of opportunities for innovation in Mexico’s insurance market given the increased competition.

Factors that may lead to positive rating actions include sustained improvement in the company’s underwriting performance and material enhancements in its risk-adjusted capitalization.

Negative rating actions could occur should GMX experience a continued deterioration of underwriting results or a decline in balance sheet strength. A substantial and sustained lack of coverage for regulatory capital requirements also could create negative rating pressure.

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 Guide to Best’s Credit Ratings.

  • Previous Rating Date: Jan. 16, 2019

  • 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.

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 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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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