AM Best

AM Best Revises Outlooks to Positive and Affirms Credit Ratings of BUPA México, Compañía de Seguros, S.A. de C.V.

 Salvador Smith
Senior Financial Analyst
+52 55 1102 2720, ext. 109

Eli Sanchez
Associate Director, Analytics
+52 55 1102 2720, ext. 107
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jeff Mango
Managing Director, Strategy & Communications
+1 908 439 2200, ext. 5204


AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of C++ (Marginal), the Long-Term Issuer Credit Rating of “b+” (Marginal), and the Mexico National Scale Rating of “bbb.MX” (Good) of BUPA México, Compañía de Seguros, S.A. de C.V. (Bupa Mexico) (Mexico).

The Credit Ratings (ratings) reflect Bupa Mexico’s balance sheet strength, which AM Best assesses as weak, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The positive outlooks result from improvements in the company’s balance sheet strength underpinned by an adequate risk-adjusted capitalization, as measured by Best´s Capital Adequacy Ratio (BCAR), following the company’s change in reinsurance program, and fully retained quality business.

Bupa Mexico is a subsidiary of Bupa Insurance Company (BIC), and is tied to the group’s commercial strategy of expanding into Mexico’s insurance market, leveraging on the Bupa brand. Bupa Mexico’s focus is on the individual and group major medical coverage segment, and the individual segment represents the biggest share of business, at approximately 89%. The target market used to be small clients with high net worth; however, the company is seeking to diversify itself by opening up coverage to other sectors, with a higher volume of lower premium business.

The company’s historically favorable financial flexibility was achieved through the capital and reinsurance support historically provided by its ultimate parent. Beginning in third-quarter 2021, changes in the Mexico-based subsidiary’s reinsurance program significantly raised its underwriting risk, pressuring BCAR. Nonetheless, the company’s flagship business, which previously was ceded for the most part, historically has demonstrated operating performance in line with industry benchmarks, enhancing the company’s balance sheet strength assessment.

Bupa Mexico’s business volume has outpaced the market for the past five years, resulting in a compound annual growth rate of 17%. However, an offsetting rating factor is the small size of the subsidiary, reflected in a market share of 3% as of December 2021 in an industry led by bigger participants. As of August 2022, Bupa Mexico posted a positive bottom-line result of MXN 193 million, which was mainly a result of contained claims, as well as a transition to an internal service team, which includes areas of customer service and a core business system. The company foresees these changes reducing operating expenses in the medium term; however, a challenging and concentrated operating environment raise uncertainty over the expected success of the new business strategy.

Positive rating actions could occur as a result of sustained improvement in balance sheet strength as a consequence of the new business strategy being successfully executed. Negative rating actions could occur if the strategic importance of the company to Bupa group decreases, which could diminish AM Best’s expectations of parental support toward the Mexico-based subsidiary. Negative rating actions could also take place as a result of the execution risk derived from the new business strategy.

The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Nov. 13, 2020), 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:

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

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

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

  • Scoring and Assessing Innovation (Version March 5, 2020)

  • Understanding Global BCAR (Version June 30, 2022)

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: Sept. 17, 2021

  • Date Range of Financial Data Used: Dec. 31, 2016-Aug. 31, 2022

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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