Best’s News & Research Service - December 04, 2025 01:34 PM (EST)
AM Best Upgrades Issuer Credit Rating and Revises Outlooks to Stable for Tokio Marine HCC Mexico Compañía Afianzadora, S.A. de C.V.
- December 04, 2025 01:34 PM (EST)
//BestWire// - AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” (Excellent) from “a” (Excellent) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Mexico National Scale Rating (NSR) of “aaa.MX” (Exceptional) of Tokio Marine HCC Mexico Compañía Afianzadora, S.A. de C.V. (TMHCC Mexico) (Mexico City, Mexico). AM Best has revised the outlooks to stable from negative for the Long-Term ICR and FSR. The outlook of the NSR is stable.
The Credit Ratings (ratings) reflect TMHCC Mexico’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The revised outlooks to stable from negative reflect AM Best’s expectation that TMHCC Mexico will maintain its strategic importance to its parent over the intermediate medium term, and that the Mexican subsidiary will maintain its fundamentals, underpinned by a neutral business profile, and a very strong balance sheet strength assessment.
The upgrade of the Long-Term ICR and the revised outlooks reflect TMHCC Mexico’s affiliation with its parent company, Houston Casualty Company (HC), in terms of reinsurance protection, ERM and capital commitments. Limiting the ratings is the inherent risk of the company’s ongoing execution of its business plan, and the volatility of Mexico’s economy.
TMHCC Mexico is the Mexico-based surety subsidiary of HC; the former company received regulatory approval for operations in April 2019 and issued its first policy in July 2019. HC and TMHCC Mexico also have a sister company, Tokio Marine Compañía de Seguros, S.A. de C.V. (TMX), which is domiciled in Mexico. TMHCC Mexico takes advantage of TMX’s corporate structure, which provides additional support to the operation.
TMHCC Mexico is developing its presence in Mexico through a predominant mix of construction and commercial administrative surety, strongly backed by a comprehensive reinsurance program largely placed with its parent company.
TMHCC Mexico’s very strong balance sheet strength assessment is derived from its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). To achieve its business targets, the company was capitalized with MXN 81.8 million in July 2019 and with MXN 30 million in November 2023. The company might require additional capital contributions as the operation evolves.
The adequate assessment of TMHCC Mexico’s operating performance reflects that the company has consistently contributed to profitable results at the consolidated group level, with good combined ratios and positive pretax operating income highlighting TMHCC Mexico’s role within the larger structure and the importance to the group’s overall business strategy and operating performance.
While AM Best does not consider it likely, positive rating actions could take place from a successful consolidation of TMHCC Mexico’s business strategy supported by prudent growth and underwriting practices.
Negative rating actions could take place if adverse development of the underwriting portfolio erodes the company’s capital base and reduces risk-adjusted capitalization to a level that no longer supports the ratings. Likewise, negative rating actions also could occur if AM Best determines that the strategic importance of the Mexico subsidiary to HC has decreased.
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)
- Rating Surety Companies (Version April 25, 2024)
- Understanding Global BCAR (Version Sept. 18, 2025)
- Available Capital and Insurance Holding Company Analysis (Version Sept. 18, 2025)
- Best's National Scale Ratings (Version July 31, 2025)
- 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: Nov. 15, 2024
- Initial Rating Date: Oct. 7, 2019
- Date Range of Financial Data Used: Dec. 31, 2019-Sept. 30, 2025
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