Best’s News & Research Service - March 08, 2022 03:42 PM (EST)
AM Best Assigns Credit Ratings to Seguros El Potosí, S.A.
- March 08, 2022 03:42 PM (EST)
Mexico City //BestWire// - AM Best has assigned a Financial Strength Rating of A- (Excellent), a Long-Term Issuer Credit Rating of “a-” (Excellent) and a Mexico National Scale Rating (NSR) of “aaa.MX” (Exceptional) to Seguros El Potosí, S.A. (El Potosí) (San Luis Potosi, Mexico). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect El Potosi’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The stable outlooks reflect the company’s ability to strengthen its capital base through positive bottom-line results in recent years, while implementing its business strategy in Mexico’s competitive insurance market.
El Potosi’s very strong balance sheet strength recognizes the company’s ability to strengthen its capital base to adequately match its obligations and risk appetite. The very strong assessment also recognizes the conservative profile of El Potosí’s investment portfolio and concentration in Mexico fixed income securities.
El Potosi has consistently posted positive bottom-line results; the company’s operating performance is characterized as being profitable, which has been achieved through technical results and propelled by investment income. AM Best expects El Potosi to maintain premium sufficiency levels while implementing its growth strategy.
AM Best assesses the company’s business profile as neutral; the company underwrites premiums across several states through a mix of distribution channels and has a diversified portfolio of products. However, underwriting risks are concentrated in Mexico. El Potosí’s ERM is considered appropriate, as it is well-integrated into its operations. The company has a sound reinsurance program in place with highly rated reinsures with an excellent level of security.
Positive rating actions could occur if El Potosí is able to demonstrate a consistent upward trend of positive bottom-line results, underpinned by favorable technical results and investment income, as well as stability in key operating metrics. Negative rating actions could occur should risk-adjusted capitalization deteriorate due to a significant cash withdrawal or a decline in operating results that ultimately translates into an eroded capital base.
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)
- Catastrophe Analysis in AM Best Ratings Version (Oct. 13, 2017)
- 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: Not Rated
- Date Range of Financial Data Used: Dec. 31, 2015-Sept. 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.
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.