Best’s News & Research Service - December 16, 2021 01:12 PM (EST)
AM Best Revises ICR Outlook to Negative; Affirms Credit Ratings of Aserta Seguros Vida, S.A. de C.V., Grupo Financiero Aserta
- December 16, 2021 01:12 PM (EST)
Mexico City //BestWire// - AM Best has revised the outlooks to negative from stable for the Long-Term Issuer Credit Rating (Long-Term ICR) and the Mexico National Scale Rating (NSR) and affirmed the Financial Strength Rating (FSR) of B++ (Good), the Long-Term ICR of “bbb+” (Good) and the Mexico NSR of “aa+.MX” (Superior) of Aserta Seguros Vida, S.A. de C.V., Grupo Financiero Aserta (ASV) (Mexico City, Mexico). The outlook of the FSR is stable.
The ratings reflect ASV’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The negative Long-Term ICR and Mexico NSR outlooks reflect the impact of current economic uncertainty on ASV’s operating performance, as well as the challenges that company faces regarding business expansion, which could potentially affect risk-adjusted capitalization.
The ratings also reflect ASV’s integration into Grupo Financiero Aserta, S.A. de C.V. (GFA) in terms of operations, capital support, business infrastructure and ERM.
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 2021, 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 30th largest insurer in Mexico’s life insurance segment, based on gross written premium, with a market share of less than 1% as of June 2021.
The company is focused on prioritizing underwriting quality over premium growth, renewing only the businesses that were profitable, while navigating through the challenges of being a life insurer amid the COVID-19 pandemic.
Risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), stands at the strongest level, reflecting capital support from its parent. The last capital contribution took place in 2021 so that ASV could maintain its regulatory requirements within compliance levels.
Negative rating actions could occur if ASV’s operating performance continues to deteriorate to a point where negative bottom-line results cause the capital base to erode significantly, becoming no longer supportive of the current ratings. Negative rating actions also could occur if the support that Grupo Financiero Aserta provides to Aserta Seguros Vida decreases in AM Best’s opinion. .
The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Nov. 13, 2020), 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 Global BCAR (Version July 22, 2021)
- 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 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: Dec. 10, 2020
- Date Range of Financial Data Used: Dec. 31, 2015- June 30, 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.
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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.