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BEST'S CREDIT RATING ACTION

Best’s News & Research Service - June 30, 2021 01:27 PM (EDT)

AM Best Revises Issuer Credit Rating Outlook to Positive, Affirms Credit Ratings of Dentegra Seguros Dentales, S.A.

  • June 30, 2021 01:27 PM (EDT)

Mexico City //BestWire// - AM Best has revised the Long-Term Issuer Credit Rating (Long-Term ICR) outlook to positive from stable and affirmed the Financial Strength Rating (FSR) of A (Excellent), the Long-Term ICR of “a” (Excellent) and the Mexico National Scale Rating (NSR) of “aaa.MX” (Exceptional) of Dentegra Seguros Dentales, S.A. (DSD) (Mexico). The outlook of the FSR and NSR is stable.

The Credit Rating (rating) affirmations are in tandem with those of DSD’s affiliates within Dentegra Group, Inc., and reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The positive outlook of the Long-Term ICR reflects Delta Dental of California Group’s consistent capital accumulation, favorable returns on affiliate stock investments, and reduced capital dependence on internal surplus notes at subsidiary companies. The ratings recognize DSD’s affiliation to its parent, Delta Dental of California (DDC), part of Dentegra Group, Inc. association of Delta Dental companies, a leading U.S. dental insurer, which provides synergies and operating efficiencies to its Mexico subsidiary. DDC’s rating affirmations reflect the organization’s strongest level of risk-adjusted capital on a consolidated basis, strong operating performance assessment, and continued market penetration through numerous U.S. state exchanges and dental coverage to Medicaid recipients among other factors, as demonstrated by its FSR of A (Excellent) and Long-Term ICR of “a” (Excellent).

The rating affirmations also reflect DSD’s risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), conservative investment strategy and strong underwriting practices. 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.

DSD initiated operations in Mexico in 2007 and successfully implemented its growth strategy to achieve its break-even point within five years. The company continued to be ranked as the market leader during 2020, holding over 65% of the dental insurance market. DSD operates through a network of independent agents, local brokers and other insurance companies as a complement to its medical expense plans. The company holds commercial relationships with more than 4,000 dentists throughout Mexico.

DSD 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. During 2020, the company benefited from a diminution in claims, driven by quarantine measures and a previous portfolio de-risking. DSD made adjustments to its costs structure that are expected to translate in savings and efficiencies in expenses, in order to maintain premium sufficiency levels as they continue to grow. 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 Dentegra Group, Inc., gaining operational leverage through common systems, procedures and ERM practices.

AM Best expects DSD to maintain adequate capitalization levels, supported by good underwriting practices and reinvestment of profits.

If positive rating actions are taken on the main operating subsidiaries of Dentegra Group, Inc., for it maintains current balance sheet metrics through consistent capital growth relative to asset and business risk or a reduction in asset or business risk while maintaining current capital, DSD’s ratings likely would move in tandem. Conversely, if negative rating actions are taken on the group, because of a trend of declining risk-adjusted capitalization, due either to increased high risk assets, or sustained operating losses driven by reduced pricing power or excess funds distributed to various stakeholders, the DSD’s ratings would mirror those same actions. Negative rating actions also could take place if the group experiences a deterioration in operating results driven by sustained negative premium growth or sustained lower profitability, and DSD’s ratings would reflect those actions.

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:


  • AM Best’s Ratings On a National Scale (Version Oct. 13, 2017)

  • Available Capital & Holding Company Analysis (Oct. 13, 2017)

  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Universal BCAR (Version March 11, 2021)

  • Understanding BCAR for U.S. and Canadian Life/Health Insurers (Version June 10, 2021)

  • Scoring and Assessing Innovation (Version March 5, 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: June 30, 2020

  • Date Range of Financial Data Used: Dec. 31, 2014-March 31, 2021

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.

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

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

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.



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