Best’s News & Research Service - February 23, 2023 11:53 AM (EST)
AM Best Affirms Credit Ratings of Assurant Daños México, S.A. and Assurant Vida México, S.A.
- February 23, 2023 11:53 AM (EST)
Mexico City //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) 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). The outlook of these Credit Ratings (ratings) is positive. 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.
The 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 (ERM).
The positive FSR and Long-Term ICR outlooks reflect the company’s consistent reinforcement of its strong balance sheet strength while maintaining the strongest level of risk-adjusted capitalization 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 steppingstone 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, telecommunications 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 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 2021-2022, ADM maintained its balance sheet strength at a strong level as the company continued to strengthen its capital base through the reinvestment of earnings. Premium growth during 2022 benefitted from a better sales performance in the company’s global auto, mobile, and home, retail and original equipment manufacture business lines, as well as commercial alliances with high profile distributors. As of December 2022, ADM has been able to maintain profitability through positive technical and underwriting results, and supported by an increase in investment income, partially resulting from the high interest rate environment.
For 2021 and 2022, AVM’s balance sheet strength was at a strong level, mainly supported by profitability. AVM’s underwriting results also benefitted from a reserve release in 2022. The company presented positive bottom-line results as of December 2022, 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 could 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’s Ratings On a National Scale (Version Oct. 13, 2017)
- Available Capital & 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 June 30, 2022)
- 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: March 8, 2022
- Date Range of Financial Data Used: Dec. 31, 2016-Dec. 31, 2022
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.