AM Best


AM Best Affirms Credit Ratings of Assurant Daños México, S.A. and Assurant Vida México, S.A.


CONTACTS:

Inger Rodriguez
Associate Financial Analyst
+52 55 1102 2720, ext. 108
inger.rodriguez@ambest.com

Eli Sánchez
Associate Director, Analytics
+52 55 1102 2720, ext. 122
eli.sanchez@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

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

FOR IMMEDIATE RELEASE

OLDWICK - FEBRUARY 25, 2021 02:45 PM (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 Assurant Daños México, S.A. (ADM) and Assurant Vida México, S.A. (AVM). The outlook of these Credit Ratings (ratings) is stable. Both companies are domiciled in Mexico City, Mexico.

The ratings reflect ADM’s and AVM’s balance sheet strength, which AM Best assesses as strong, as well as each company’s adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings reflect balance sheet strength consistently maintained at strong levels. The ratings of ADM and AVM also reflect their affiliation and strategic importance to Assurant, Inc., the ultimate parent, as a stepping stone to grow in the Latin America market, as well as their respective risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The ratings also consider the solid reinsurance structure mainly supported by the group. Partially offsetting these positive rating factors are the small market share of both companies and the possibility of increasing competition within their niche markets.

ADM and AVM initiated operations in 2004 and are owned by Assurant Holding Mexico, S. de R.L. de C.V., which is part of Assurant, Inc. Distribution for both companies is based on sales through financial institutions, auto companies, telecom carriers, retailers and other channels.

ADM and AVM follow their group’s underwriting, ERM and corporate governance practices, receive reinsurance support and benefit from its brand recognition in order to expand their market share in Mexico. Both subsidiaries also benefit from their group’s capital contributions, when required, in support of growth targets.

In 2019 and 2020, ADM maintained its balance sheet strength at strong levels, despite a dividend payment carried over in 2019. Premium growth during 2020 faced pressure derived from the closure of retail stores and malls due to quarantine measures; however, underwriting results improved due to a reduction of management expenses. ADM has been able to maintain profitability as of November 2020 through positive technical results, backed up by investment income.

For 2019 and 2020, AVM’s balance sheet strength was at a strong level, mainly supported by positive bottom-line results. AVM’s premium growth also was affected in 2020, which when coupled with the company’s high levels of ceded premiums, pressured underwriting results. AVM exhibited positive bottom-line results as of November 2020, backed predominantly by investment income.

Factors that could lead to positive rating actions for ADM include improvements in operating performance that can translate into a visible upward trend of premium sufficiency while maintaining risk-adjusted capitalization metrics at the strongest level. Conversely, negative rating actions could take place if operating performance substantially deteriorated or if an aggressive growth in premiums leads to a drop in risk-adjusted capitalization to a level no longer supportive of the current ratings.

Positive rating factors that could lead to an upgrade for AVM’s ratings are sustained improvements in underwriting results that continue to strengthen its capital base and reduce its dependence on capital support from its group. Negative rating factors that could result in a downgrade include material deterioration in underwriting

performance that results in a decline in risk-adjusted capitalization.

Negative rating actions also would occur if the subsidiaries’ parental support or their strategic importance to the group deteriorates in AM Best’s view.

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:


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

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

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

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

  • Understanding Universal BCAR (Version June 11, 2020)

  • Scoring and Assessing Innovation (Version 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: Feb. 26, 2020

  • Date Range of Financial Data Used: Dec. 31, 2014- Nov. 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.

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


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