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Best’s News & Research Service - March 07, 2024 01:22 PM (EST)

AM Best Affirms Credit Ratings of Seguros Monterrey New York Life, S.A. de C.V.

  • March 07, 2024 01:22 PM (EST)
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//BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior), the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa+” (Superior) and the Mexico National Scale Rating of “aaa.MX” (Exceptional) of Seguros Monterrey New York Life, S.A. de C.V. (SMNYL) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect SMNYL’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The ratings also reflect SMNYL’s strong integration with its parent company, New York Life Insurance Company (New York Life), which has an FSR of A++ (Superior) and a Long-Term ICR of “aaa” (Exceptional), risk-adjusted capitalization assessed at the strongest level, robust ERM, sound operating performance and a highly competitive position in Mexico’s life insurance segment. Partially offsetting these positive rating factors are SMNYL’s challenging expansion strategy within Mexico’s very competitive market amid economic conditions characterized by the prevailing high interest rate environment.

SMNYL is the Mexico-based subsidiary of New York Life following its acquisition of Seguros Monterrey in 2000. SMNYL, established in Mexico in 1940, mainly underwrites life insurance products through a solid agent network. As of September 2023, SMNYL was Mexico’s fourth-largest insurer, with a market share of 8.3% in the country’s life and health segment. The company’s product portfolio is composed of individual life (61%), individual medical expenses (24%), group medical expenses (13%) and group life (2%).

SMNYL benefits from its ultimate parent’s strong brand recognition. In addition, SMNYL’s integration within the group is key to the group’s rating levels, as New York Life actively supervises SMNYL’s strategy and operations, further enhancing its corporate governance and product innovation. Within New York Life’s international structure, SMNYL stands out as one of the most significant in terms of its good profitability and market presence, which makes this subsidiary’s operation and strategy very likely to be supported by the group, if required.

The company grew profitably in 2022-2023, with its strategy driven by results and cost efficiencies, allowing it to sustain a healthy capital position. AM Best expects SMNYL to maintain its trend of positive results, as it benefits from a decline in FX and improved investment yields. given the high interest rate environment. Additionally, SMNYL has adjusted its commercial efforts in conjunction with emerging opportunities in the challenging individual life segment. Due to the company’s robust ERM and corporate governance capabilities, AM Best believes that SMNYL has sufficient technical tools and market expertise to achieve an adequate balance between growth and profitability. The company has maintained an adequate investment portfolio to support its asset-liability matching.

SMNYL’s risk-adjusted capitalization is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and supported by reported strong net income, despite dividend payments in 2023, which did not materially affect AM Best’s view of the company’s risk-adjusted capitalization. AM Best expects that SMNYL’s capital management capabilities will continue to benefit base capital through strong net income and immaterial dividend payments. Due to the nature of the life insurance business and its investment components, SMNYL is susceptible to changes in interest rates, which have significantly hiked since 2021. However, adjustments to the company’s investment portfolios are focused on maintaining credit quality and asset-liability matching within the group’s guidelines.

AM Best considers SMNYL to be well positioned at its current rating levels; nonetheless, positive rating actions, while highly unlikely, could occur if AM Best's view of the strategic importance of the Mexican subsidiary to its group increases. Negative rating actions could occur if large capital outflows occur or operating performance weakens and impacts the company’s balance sheet strength in the medium term. Furthermore, negative rating actions could result if AM Best’s view on the strategic importance of the Mexico-based subsidiary to its group decreases or if there are negative rating actions on New York Life.

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:

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

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

  • Evaluating Country Risk (Version May 4, 2023)

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

  • Understanding Global BCAR (Version July 6, 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: Feb. 24, 2023

  • Initial Rating Date: Feb. 9, 2016

  • Date Range of Financial Data Used: Dec. 31, 2017-Dec. 31, 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 International New York United States Financial Strength Press Release A.M. Best Rating Services, Inc. Insurance Best's Credit Rating Action Issuer Credit Rating Life Insurance

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