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Best’s News & Research Service - June 07, 2017 01:44 PM (EDT)

A.M. Best Affirms Credit Ratings of Dentegra Seguros Dentales, S.A.

  • June 07, 2017 01:44 PM (EDT)
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Mexico City //BestWire// - A.M. Best has affirmed the Financial Strength Rating (FSR) of A (Excellent), the Long-Term Issuer Credit Rating of “a” and the Mexico National Scale Rating of “aaa.MX” of Dentegra Seguros Dentales, S.A. (DSD) (Mexico). The outlook for these Credit Ratings (ratings) is stable.

The ratings affirmations are in tandem with those of DSD’s affiliates within the Delta Dental of California Group (see press release dated June 7, 2017), and reflect DSD’s good risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), overall strong operating performance, conservative investment strategy and strong underwriting practices. The ratings also recognize DSD’s affiliation to its ultimate parent, Delta Dental of California (DDC), a leading dental insurer in the United States, which provides synergies and operating efficiencies to its Mexican subsidiary. DDC’s rating affirmations reflect growth trends in premium volume, profitability and risk-adjusted capital levels reported on a consolidated and individual company basis, as demonstrated by its FSR of A (Excellent) and Long-Term ICR of “a”. Offsetting DSD’s positive rating factors are the company’s relatively small size within Mexico’s insurance industry and its concentration in two products: dental and vision insurance. The stable outlook for DSD’s ratings reflects the same outlook on DDC’s ratings.

DSD initiated operations in Mexico in 2007, and as a result of successfully implementing its growth strategy, achieved its break-even point within five years. The company underwrites dental insurance and in 2016 was ranked as a market leader in this line of business. DSD operates through a network of independent agents, local brokers and other insurance companies as a complement of their medical expense plans. The company holds commercial relationships with more than 3,800 dentists in more than 257 cities in Mexico.

DSD’s historical risk-adjusted capitalization is good, as measured by BCAR. The Mexican subsidiary is susceptible to underwriting risk as it retains 100% of its premiums. However, the company has demonstrated strong underwriting practices, and these have resulted in positive technical performance and positive bottom line results in recent years. In 2016, profitability remained solid and improved further, reflected by a 28.6% return on equity. The company’s investment policies are conservative and in line with local and group guidelines and provide a steady flow of revenues to back its positive operating results. Moreover, the company benefits from being integrated into the group, gaining operational leverage through common systems, procedures and enterprise risk management practices. The group has historically demonstrated its support to DSD in terms of capital injections in order to fund growth opportunities.

A.M. Best expects DSD to maintain adequate capitalization levels supported by good underwriting practices and reinvestment of profits into the subsidiary. The following factors could result in strategic rating drivers for the overall group: factors that could lead to positive rating actions include profitable membership growth and continued improvement in risk-adjusted capitalization. Factors that could lead to negative rating actions include decreasing membership and a deterioration in operating results that leads to a significant weakening of risk-adjusted capital.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. 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 as part of the company’s analysis:


  • A.M. Best’s Ratings on a National Scale (Version Sept 5, 2014)

  • Evaluating Country Risk (Version May 2, 2012)

  • Rating Members of Insurance Groups (Version Dec. 15, 2014)

  • Risk Management and the Rating Process for Insurance Companies (Version April 2, 2013)

  • Understanding Universal BCAR (Version May 1, 2017)

The following applied criteria supplemented the analysis of the ultimate rating unit:


  • Understanding BCAR for U.S. and Canadian Life/Health Insurers (Version May 10, 2017)

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 Understanding Best’s Credit Ratings.


  • Previous Rating Date: July 8, 2016

  • Date of Financial Data Used: March 31, 2017

This press release relates to rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.

A.M. 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. A.M. Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, A.M. Best cannot attest as to the accuracy of the information provided.

A.M. Best’s credit ratings are independent and objective opinions, not statements of fact. A.M. 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. A.M. 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.

A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.



Mexico Dental Insurance Latin America Press Release Insurance Best's Credit Rating Action


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