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MARCH 05, 2021 01:27 PM (EST)

AM Best Affirms Credit Ratings of Insignia Life S.A. de C.V.


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

Eli Sanchez
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

MEXICO CITY - MARCH 05, 2021 01:27 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 Insignia Life S.A. de C.V. (Insignia) (Mexico). The outlook of these Credit Ratings (ratings) is positive.

The ratings reflect Insignia’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The positive outlooks reflect the prospect of a sustained improvement in Insignia’s balance sheet strength derived from the December 2019 and March 2020 capital contribution received from its holding company, Proyecto Insignia, S.A.P.I. de C.V.

Insignia (est. Mexico 2008) underwrites individual and group life insurance through a commercial network of more than 3,000 agents and 10 offices distributed throughout Mexico. Insignia’s growth strategy has been supported by advertising and incentives for employees and agents, allowing for premium growth well above the market’s rate.

Insignia’s balance sheet strength reflects the improvement of its risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as a result of the capital contributions carried in 2019 and in March 2020. Shareholder’s commitment to the company’s growth and strategy are key factors of the ratings. Offsetting these positive rating factors is Insignia’s holding company’s high financial leverage.

In 2020, Insignia reported positive bottom-line results for the fourth consecutive year. Profitability was backed by investment income, as the company’s investment strategy continues to be conservative and provides a steady flow of revenue to back its underwriting results. COVID-19-related claims impacted Insignia’s during 2020, mainly affecting the group life line of business; however, impact on the individual life line of business was within the conservative estimate. Insignia expects the COVID-19 pandemic effect to decrease gradually, allowing the combined ratio to converge toward premium sufficiency levels in the medium term.

The ratings also consider Insignia’s sound underwriting practices, a highly experienced management team and ongoing improvements in ERM. AM Best expects Insignia to strengthen its ERM framework through ongoing improvements involving systems updates and an internal economic capital model.

Key factors that could lead to positive rating actions for Insignia include a continuation of its current risk-adjusted capitalization as the business cycle and strategy evolve. Positive rating actions also could occur from lower financial leverage at the holding company level.

Negative rating actions could occur should Insignia’s holding company increase its financial leverage or face pressure to service its debt. Negative rating actions also could take place if there is a constant deterioration of the company’s underwriting quality and bottom-line results.

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

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

  • 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: March 5, 2020

  • Date Range of Financial Data Used: Dec. 31, 2014-Dec. 31, 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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.


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