SEPTEMBER 11, 2020 03:45 PM (EDT)

AM Best Downgrades Credit Ratings of XL Seguros México, S.A. de C.V.; Places Under Review With Negative Implications

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

Eli Sanchez
Associate Director, Analytics
+52 55 1102 2720 ext. 122

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

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


AM Best has downgraded the Financial Strength Rating to B++ (Good) from A+ (Superior), the Long-Term Issuer Credit Rating to “bbb+” from “aa-”, and the Mexico National Scale Rating to “aa+.MX” from “aaa.MX” of XL Seguros México, S.A. de C.V. (XLSM) (Mexico). Concurrently, AM Best has placed these Credit Ratings (ratings) under review with negative implications. This rating action follows the announcement that the legal authorization to transfer XLSM’s portfolio to AXA Seguros S.A. de C.V. (AXA) has been requested.

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

Prior to these rating actions, XLSM was a member of XL Bermuda Ltd (XL) and deemed by AM Best to be a strategically important subsidiary. On Aug. 26, 2020, XLSM announced that it has initiated the authorization procedure with Mexico authorities for a portfolio transfer between XLSM and AXA Seguros. Due to this event, AM Best no longer considers XLSM as strategically important, and has removed its group status.

XLSM’s balance sheet strength level of very strong is the result of the company’s risk-adjusted capitalization achieved through the reinvestment of earnings over the years, along with its extensive reinsurance program placed within the XL Group. While facing volatility in premium growth, given the competitive nature of the property/casualty segment, XLSM has remained profitable, supported by reinsurance commissions for its ceding profile. XLSM’s business profile is limited by the remaining underwriting capabilities once the portfolio transfer is complete.

The portfolio transfer remains in an early stage and is still subject to definitive approval by Mexico authorities. The ratings will remain under review with negative implications until AM Best can fully assess the financial position of XLSM after the completion of the transaction.

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:

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

  • Understanding Universal BCAR (Version, June 11, 2002)

  • 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)

  • Scoring and Assessing Innovation (March 5, 2020)

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: Dec. 12, 2019

  • Date Range of Financial Data Used: Dec. 31, 2014-June 30, 2020

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.

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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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