Best’s News & Research Service - May 30, 2025 01:59 PM (EDT)
AM Best Affirms Credit Ratings of Nacional de Seguros S.A. Compañía de Seguros Generales
- May 30, 2025 01:59 PM (EDT)
//BestWire// - AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Nacional de Seguros S.A. Compañía de Seguros Generales (Nacional de Seguros) (Bogota, Colombia). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Nacional de Seguros’ balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The ratings also reflect the company’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and the profitability Nacional de Seguros has achieved during its track record. Partially offsetting these positive rating factors is the size of the company, which limits business diversification given the inherent concentration risk, and its high dependence on reinsurance.
Nacional de Seguros began operations in 2014 after acquiring Ecoseguros S.A., a company in voluntary liquidation, with fulfillment and liability insurance licenses granted by the Superintendencia Financiera de Colombia (SFC). Nacional de Seguros had less than a 1% market share in Colombia’s property/casualty segment, as of December 2024, and is the fifth-largest company in the fulfillment insurance sector with an 8.2% market share.
Nacional de Seguros’ risk-adjusted capitalization stands at the strongest level, as measured by BCAR, and is supported by a comprehensive reinsurance program and its consistent historical profitability. Credit risk, driven by reinsurance recoverables, is the main factor that could impact the company’s BCAR assessment.
The company’s business operations are focused exclusively on Colombia: 75% of premiums are generated in Bogota; 15% from Medellin; and 5% from other cities.
Despite reporting fluctuations in gross premiums, the company has maintained a steady retention level, and constant profitability. Nacional de Seguros’ underwriting metrics are characterized by contained loss ratios, and negative acquisition cost ratios due to its high ceding profile. The company’s investment income has exhibited a stable trend in the past few years, moderately supporting Nacional de Seguros’ income generation.
Negative rating actions could occur as a result of ERM framework deficiencies, reflected by inadequate exposure management practices, or if the ERM framework becomes unsupportive of the current assessment by any other means. Negative rating actions also could occur if operating performance metrics deteriorate to the point of no longer being consistent with the adequate assessment or if adverse development of the underwriting portfolio or significant dividend payments erode the company’s capital base and reduce risk-adjusted capitalization to a level that no longer supports the ratings. Although unlikely, positive rating actions could result from a successful consolidation of the company's business strategy, supported by prudent growth and underwriting practices.
The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Aug. 29, 2024), 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:
- Evaluating Country Risk (Version June 6, 2024)
- Understanding Global BCAR (Version Aug. 1, 2024)
- Available Capital and Insurance Holding Company Analysis (Version Aug. 15, 2024)
- Rating Surety Companies (Version April 25, 2024)
- Scoring and Assessing Innovation (Version Feb. 20, 2025)
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, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best’s Credit Ratings.
- Previous Rating Date: May 30, 2024
- Initial Rating Date: May 27, 2022
- Date Range of Financial Data Used: Dec. 31, 2018-Dec. 31, 2024
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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.
If the ratings referred in this press release do not indicate a specific country suffix, it is understood that they are granted globally and not on a national scale.
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. AM Best keeps certain activities of its business units separate from each other to preserve the independence and objectivity of their respective activities. As a result, certain business units of AM Best may have information that is not available to other AM Best business units. AM Best has established policies and procedures to maintain the confidentiality of certain confidential (non-public) information received in connection with each analytical process. 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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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.