Best's News


Best’s News & Research Service - January 24, 2024 01:17 PM (EST)

AM Best Revises Outlooks to Stable and Affirms Credit Ratings of El Aguila, Compañía de Seguros, S.A. de C.V.

  • January 24, 2024 01:17 PM (EST)
    print icon

Mexico City //BestWire// - AM Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of El Aguila, Compañía de Seguros, S.A. de C.V. (El Aguila) (Mexico City, Mexico). Concurrently, AM Best has affirmed the Mexico National Scale Rating of “aaa.MX” (Exceptional) of El Aguila with a stable outlook.

These Credit Ratings (ratings) reflect El Aguila’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.

The outlook revision on the FSR and Long-Term ICR to stable from positive reflects AM Best’s expectation of El Aguila’s stabilizing its operating performance to previous levels while facing the current market developments.

The ratings also reflect El Aguila’s support from its parent company (including continuous capital contributions), Great American Insurance Company, which currently has an FSR of A+ (Superior) and a Long-Term ICR of “aa-” (Superior), each with a stable outlook.

El Aguila was established in Mexico in 1994 and is a wholly owned subsidiary of Great American Insurance Company. Since 2016, El Aguila has diversified into other property/casualty lines besides the motor business, targeting small- and medium-size enterprises in the commercial segment through an independent network of local distribution partners. Given its small size, the company shows a greater geographic concentration than its peers, making it more vulnerable to soft market conditions in its main regional markets within Mexico.

The company focuses on having higher renewal rates than those registered by its main peers, by making heavy investments in advertising and direct sales channels, in comparison with traditional distribution in Mexico’s auto insurance segment that is typically done through agents, car agencies and bancassurance alliances.

The company’s portfolio grew by 14% in 2022 and expected to grow approximately 18% in 2023, which is in line with its expectations, however with a negative bottom line performance. Challenges for El Aguila in 2023 included net results being limited either from high acquisition costs in its auto line, the creation of catastrophe reserves and also from the impact of Hurricane Otis on its overall portfolio. AM Best will continue to monitor accumulated results and the impact on the company’s capital base, amid continuous support from its parent company in the form of capital contributions.

El Aguila’s risk-adjusted capitalization is strong, as measured by Best’s Capital Adequacy Ratio (BCAR), with underwriting risk standing as the main component for required capital. For 2023, the company benefited from a capital contribution by its parent company to support its capital position after two years of consecutive negative results. A key factor going forward for AM Best’s assessment of balance sheet strength will be the reinsurance recoverable generated by the effects of Hurricane Otis and the premium leverage to policyholders surplus.

Negative rating actions could occur if the company’s capital base and risk-adjusted capitalization deteriorate to levels that no longer support the ratings, resulting from the materialization of execution risk or limitations in its business profile. Positive rating actions are unlikely in the short term, but they could occur if El Aguila sustains improvements in underwriting results and risk-adjusted capitalization in a steady fashion. A negative change in AM Best’s perception regarding the actual or perceived level of El Aguila’s strategic importance to the Great American Insurance Company group also could impact the company’s ratings.

The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Jan. 18, 2024), 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

Key insurance criteria reports utilized:

  • AM Best’s Ratings On a National Scale (Version June 15, 2023)

  • Available Capital & Insurance Holding Company Analysis (Version Jan. 18, 2024)

  • Catastrophe Analysis in AM Best Ratings (Version March 10, 2023)

  • Evaluating Country Risk (Version May 4, 2023)

  • Scoring and Assessing Innovation (Version Feb. 27, 2023)

  • Understanding Global BCAR (Version July 06, 2023)

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, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best’s Credit Ratings.

  • Previous Rating Date: Dec. 14, 2022.

  • Initial Rating Date: Oct. 26, 2015.

  • Date Range of Financial Data Used: Dec. 31, 2017-Nov. 30, 2023

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

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.

If the ratings referred in this press release do not indicate a specific country suffix, it is understood that they are granted globally and not on a national scale.

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.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. AM Best keeps certain activities of its business units separate from each other to preserve the independence and objectivity of their respective activities. As a result, certain business units of AM Best may have information that is not available to other AM Best business units. AM Best has established policies and procedures to maintain the confidentiality of certain confidential (non-public) information received in connection with each analytical process. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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.

Mexico Financial Strength Press Release A.M. Best Rating Services, Inc. Insurance Best's Credit Rating Action Issuer Credit Rating Subsidiaries

Latest News

More from Best’s News


AM Best TV

More Related Company News

To Submit News go to -