Best’s News & Research Service - March 12, 2021 01:45 PM (EST)
AM Best Revises Under Review Status to Negative for Credit Ratings of Armour Secure Insurance S.A. de C.V.
- March 12, 2021 01:45 PM (EST)
Mexico City //BestWire// - AM Best has revised the under review status to negative from developing and affirmed the Financial Strength Rating of B (Fair), the Long-Term Issuer Credit Rating of “bb” and the Mexico National Scale Rating of “a.MX” of Armour Secure Insurance S.A. de C.V. (Armour) (Mexico).
The under review with negative implications status reflects AM Best’s ongoing review of the financial situation at Armour’s holding company after the cancellation of the acquisition of its operation in Mexico by AXA XL. This transaction was cancelled at the conclusion of the waiting period for regulatory approval on Nov. 25, 2020, as established in the acquisition agreement.
The ratings reflect Armour’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management (ERM).
The strong balance sheet assessment reflects Armour’s capital base, consistently strengthened through the reinvestment of earnings over the years. Armour has been able to sustain a profitable domestic operation through its underwriting results and investment income.
Armour’s business profile is limited due to its concentration in the niche market of title insurance in Mexico, coupled with challenges ahead for the real estate market amid Mexico’s weakened economy.
AM Best’s view of the company’s ERM is marginal due to concern regarding governance and availability of information at its holding company, Trebuchet Group Holdings Limited.
The ratings will remain under review until AM Best can fully assess the financial situation at Armour’s holding company.
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:
- Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
- Evaluating Country Risk (Version Oct. 13, 2017)
- Rating Title Insurance Companies (Version July 31, 2020)
- Understanding Universal BCAR (Version June 11, 2020)
- AM Best’s Ratings On a National Scale (Version Oct. 13, 2017)
- Scoring and Assessing Innovation (Version March 5, 2020)
- Evaluating U.S. Surplus Notes (Version Oct. 13, 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 Guide to Best’s Credit Ratings.
- Previous Rating Date: Dec. 11, 2020
- Date Range of Financial Data Used: Dec. 31, 2014-Dec. 31, 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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.