Best’s News & Research Service - February 23, 2023 11:55 AM (EST)
AM Best Affirms Credit Ratings of Virginia Surety Seguros de México, S.A. de C.V.
- February 23, 2023 11:55 AM (EST)
Mexico City //BestWire// - AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Virginia Surety Seguros de México S.A. de C.V. (VSSM) (Mexico City, Mexico). 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 VSSM. The outlook of the NSR is stable.
The ratings reflect VSSM’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.
The positive 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 company’s balance sheet strength has been assessed at a strong level since it began operations in Mexico. The ratings of VSSM also factor its recent affiliation and strategic importance to Assurant, Inc., the ultimate parent, as well as its risk-adjusted capitalization at the strongest level, as measured by BCAR.
VSSM is a subsidiary of Virginia Surety Company, Inc., a general underwriting entity part of The Warranty Group, Inc. In 2017, The Warranty Group, Inc. completed a merger agreement with Assurant, Inc., with the purpose of combining insurance operations in various jurisdictions, including the operation in Mexico. VSSM started operations in Mexico in January 2017, underwriting premiums in the property/casualty segment, focused on the auto insurance line of business and other miscellaneous business lines. VSSM also underwrites specialty products, providing coverage for risks that usually are not underwritten in the traditional automobile insurance. In its miscellaneous lines of business, VSSM mainly offers coverage in case of theft or accidental damage for consumer technology products, such as cellphones, photographic and sound equipment and home appliances. VSSM places its coverage products through its network of business partners, which include manufacturers, distributors and retailers.
VSSM operates under the same management as Assurant Daños México, S.A. and Assurant Vida México, S.A., subsidiaries of Assurant, Inc. These companies operate separately but do not compete against each other; moreover, VSSM takes advantage of the operational synergies derived from being part of the Assurant group.
Factors that could lead to positive rating actions for VSSM 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 deteriorates, 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 its 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)
- Best’s Credit Rating Methodology (Version Nov. 13, 2020)
- Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
- Evaluating Country Risk (Version Oct. 13, 2017)
- Rating New Company Formations (Version Sept. 9, 2022)
- Scoring and Assessing Innovation (Version March 5, 2020)
- Understanding Global BCAR (Version June 30, 2022)
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.