MARCH 31, 2021 03:55 PM (EDT)
AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of XL Seguros México, S.A. de C.V.
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FOR IMMEDIATE RELEASE
MEXICO CITY - MARCH 31, 2021 03:55 PM (EDT)
AM Best has maintained the under review with negative implications status and 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 XL Seguros México, S.A. de C.V. (XLSM) (Mexico). AM Best placed these Credit Ratings (ratings) under review with negative implications on Sept. 11, 2020, following the announcement that the legal authorization to transfer XLSM’s portfolio to AXA Seguros, S.A. de C.V. (AXA Seguros) had been requested.
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, along with its extensive reinsurance program placed within the XL Group. XLSM has remained profitable despite volatility in its premium growth, given the competitive nature of the property/casualty segment, and continues to be supported by reinsurance commissions for its ceding profile. XLSM’s business profile is limited due to the underwriting capabilities that will remain once the portfolio transfer is complete.
The portfolio transfer 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 www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
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.
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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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.