Best’s News & Research Service - March 08, 2022 01:15 PM (EST)
AM Best Revises Outlooks to Positive, Affirms Credit Ratings of Assurant Daños México, S.A. and Assurant Vida México, S.A.
- March 08, 2022 01:15 PM (EST)
Mexico City //BestWire// - AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of Assurant Daños México, S.A. (ADM) and Assurant Vida México, S.A. (AVM). AM Best also has affirmed the Mexico National Scale Rating (NSR) of “aaa.MX” (Exceptional) of ADM and AVM. The outlook of the NSR is stable. Both companies are domiciled in Mexico City, Mexico.
The Credit Ratings (ratings) reflect ADM’s and AVM’s balance sheet strength, which AM Best assesses as strong, as well as each company’s adequate operating performance, limited business profile and appropriate enterprise risk management.
The positive outlooks on the FSR and Long-Term ICR reflect the company’s consistent reinforcement of its strong balance sheet strength while maintaining risk-adjusted capitalization assessed at the strongest level on a consolidated basis, as measured by Best’s Capital Adequacy Ratio (BCAR), underpinned by positive bottom-line results in conjunction with strategies to become more efficient.
The ratings of ADM and AVM also reflect their affiliation and strategic importance to Assurant, Inc., the ultimate parent, as a stepping stone to grow in the Latin America market. The ratings also consider the solid reinsurance structure mainly supported by the group.
ADM and AVM initiated operations in 2004 and are owned by Assurant Holding Mexico, S. de R.L. de C.V., which is part of Assurant, Inc. Distribution for both companies is based on sales through financial institutions, auto companies, telecom carriers, retailers and other channels.
ADM and AVM follow their group’s underwriting, ERM and corporate governance practices, receive reinsurance support and benefit from its brand recognition in order to expand their market share in Mexico. Both subsidiaries also benefit from their group’s capital contributions, when required, in support of growth targets.
In 2020 and 2021, ADM maintained its balance sheet strength at strong levels, as the company continued to strengthen its capital base through the reinvestment of earnings. Premium growth during 2021 benefited from the reopening of retail and commercial activity, as well as commercial alliances with high profile distributors. ADM has been able to maintain profitability as of December 2021 through positive technical results, supported by investment income.
For 2020 and 2021, AVM’s balance sheet strength was at a strong level, mainly supported by profitability. AVM’s underwriting results benefited from a reserve release during 2021. The company presented positive bottom-line results as of December 2021, backed by profitable underwriting and strengthen by investment income.
Factors that could lead to positive rating actions for ADM and AVM include a sustained reinforcement of its strong balance sheet strength underpinned by risk-adjusted capitalization at the strongest level, as measured by BCAR, and favorable results in operating performance. Conversely, negative rating actions could take place if operating performance substantially deteriorated, resulting in a decline in risk-adjusted capitalization to a level no longer supportive of the current ratings.
Negative rating actions also would occur if the subsidiaries’ parental support or their strategic importance to the group deteriorates in AM Best’s view.
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:
- AM Best Ratings On a National Scale (Version Oct. 13, 2017)
- Available Capital and Holding Company Analysis (Version Oct. 13, 2017)
- Catastrophe Analysis in AM Best Ratings (Version Oct. 13, 2017) (ADM only)
- Evaluating Country Risk (Version Oct. 13, 2017)
- Understanding Global BCAR (Version July 22, 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: Feb. 25, 2021
- Date Range of Financial Data Used: Dec. 31, 2015-Dec. 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.
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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.