Best’s News & Research Service - December 10, 2020 03:26 PM (EST)
AM Best Affirms Credit Ratings of Aserta Seguros Vida, S.A. de C.V., Grupo Financiero Aserta
- December 10, 2020 03:26 PM (EST)
Mexico City //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of B++ (Good), the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb+” and the Mexico National Scale Rating of “aa+.MX” of Aserta Seguros Vida, S.A. de C.V., Grupo Financiero Aserta (ASV) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect ASV’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The ratings reflect ASV’s integration into Grupo Financiero Aserta, S.A. de C.V. (GFA) in terms of operations, capital support, business infrastructure and ERM. Mitigating these positive factors are the challenges associated with being a newer life insurance company and volatility in bottom-line results that are inherent in a recently created insurer.
ASV started operations in 2012, focusing on life microinsurance, group life and accident and health insurance. In 2013, GFA acquired a majority stake in the company and subsequently received regulatory approval for ASV to become a member of the financial group. As of June 2020, group life insurance business composed over 99% of ASV’s business portfolio, with the rest distributed among individual life and accident and health. ASV ranked as the 29th largest insurer in Mexico’s life insurance segment, based on gross written premium, with a market share of less than 1% as of June 2020.
ASV grew premium year over year by 11.6% in 2019, as the company continued with its expansion strategy while adhering to the measures adopted in 2017 in order to improve its underwriting risk metrics. In 2020, the company has prioritized underwriting quality, renewing only the businesses that were profitable. In coming years, ASV plans to stabilize premium growth while achieving premium sufficiency.
Risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains at a strong level, reflecting capital support from its parent. The last capital contribution took place in 2019 so that ASV could maintain its regulatory requirements within compliance levels.
Going forward, AM Best expects ASV to stabilize its results and underwriting in the medium term and to keep expanding its distribution network to achieve a larger scale. Positive rating actions may occur if the company is able to achieve stability in its operating performance, which translates into an upward trend of positive bottom-line results. Positive rating actions may also occur if the company’s risk-adjusted capitalization improves and strengthens while ASV achieves a larger scale of business. Negative rating actions could occur if GFA’s support diminishes in AM Best’s view, if ASV’s operating performance deteriorates or if its capital base erodes significantly.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, 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 Oct. 13, 2017)
- Understanding Universal BCAR (Version June 11, 2020)
- Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
- AM Best’s Ratings On a National Scale (Version Oct. 13, 2017)
- Scoring and Assessing Innovation (Version March 05, 2020)
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: Nov. 14, 2019
- Date Range of Financial Data Used: Dec. 31, 2014 – June 30, 2020
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.
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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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.