Best’s News & Research Service - April 16, 2026 01:19 PM (EDT)
AM Best Affirms Credit Ratings of Seguros El Potosí, S.A.
- April 16, 2026 01:19 PM (EDT)
//BestWire// - AM Best has affirmed the Financial Strength Rating of A- (Excellent), the Long-Term Issuer Credit Rating of “a-” (Excellent) and the Mexico National Scale Rating of “aaa.MX” (Exceptional) of Seguros El Potosí, S.A. (El Potosí) (San Luis Potosi, Mexico). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect El Potosí’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).
El Potosí is a Mexico-based insurer underwriting property/casualty, life, and accident and sickness insurance. Founded in 1946, the company began operations in the fire insurance segment and expanded into automobile insurance in 1971. Over time, it has diversified into multiple lines of business. The company is majority-owned subsidiary of Seguros Atlas, S.A. (Atlas) and operates in a competitive market, with a market share of less than 1% based on gross written premiums (GWP) in 2025.
El Potosí’s balance sheet strength is underpinned by its risk-adjusted capitalization, which is at the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capital base has historically benefited from its reinvestment of profits.
In 2025, earnings declined by 9% year-over-year, primarily driven by higher claims costs associated with the new value-added tax treatment in Mexico, which increased the cost of claims, particularly in the motor line, coupled with a slight increase in operating expenses. Additionally, El Potosí’s investment performance has experienced some pressure due to declining interest rates, as the company’s portfolio is concentrated in Mexican fixed-income securities; however, it continues to help the company deliver positive bottom-line results. Despite these pressures, the very strong balance sheet strength assessment reflects AM Best’s view of the company’s prudent capital management, while supporting growth and maintaining divided payments.
El Potosi’s operating performance is assessed as adequate, supported by solid business generation, reflected in a 30% year-over-year increase in GWP and stable expense management. However, underwriting results remain under pressure, as evidenced by a combined ratio above 100%. Nonetheless, overall profitability continues to be supported by solid investment income and underwriting actions aimed at improving profitability quality and margins. Looking ahead, AM Best expects El Potosi to restore operating efficiency gradually, supported by prudent growth and sound portfolio management.
AM Best assesses El Potosí’s business profile as neutral, primarily due to its significant reliance on the automobile line, which accounts for 54% of the total portfolio. Premiums are concentrated in Mexico; however, the company benefits from diversification across different states and maintains a mixed distribution channel strategy, which partially mitigates concentration risks.
El Potosi’s risk management framework follows a structured process centered on risk monitoring and is well integrated into its operations. The company adheres to ERM practices established by its holding company. Additionally, El Potosi maintains a comprehensive reinsurance program placed with highly rated counterparties. AM Best assesses the company’s ERM as appropriate.
Negative rating actions could occur if capital adequacy fails to keep pace with business growth, leading to a weakening in its balance sheet strength. Negative rating actions could also arise by a sustained deterioration in
operating performance, particularly if underlying profitability weakens. Positive rating actions could occur if El
Potosí’s operating performance strengthens on a sustained basis, driven by stronger underwriting performance.
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 Sept. 18, 2025)
· Catastrophe Analysis in AM Best Ratings (Version Feb. 27, 2026)
· 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: April 22, 2025
· Initial Rating Date: March 8, 2022
· Date Range of Financial Data Used: Dec. 31, 2020-Dec. 31, 2025
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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