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FOR IMMEDIATE RELEASE
MEXICO CITY - DECEMBER 08, 2023 02:03 PM (EST)
AM Best has affirmed the Financial Strength Rating of A- (Excellent), the Long-Term Issuer Credit Rating of “a-” (Excellent) and the Mexico National Scale Rating (NSR) of “aaa.MX” (Exceptional) of General de Seguros, S.A. (Genseg) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Genseg’s balance sheet strength, which AM Best assesses as strongest, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The ratings also recognize Genseg’s affiliation and strategic importance to its ultimate parent, Peña Verde, S.A.B., a leading group in Mexico’s insurance and reinsurance industries, which provides synergies and operating efficiencies, as well as the reinsurance support from an affiliated company, Reaseguradora Patria, S.A.
Genseg initiated operations in Mexico City in 1972. The company mainly underwrites motor, accident and health, a mix of property/casualty and life insurance lines, and historically has participated in the crop insurance market. Genseg operates throughout Mexico with a network of independent agents, brokers and commercial offices.
Genseg’s balance sheet strength is supported by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capitalization and liquidity provide Genseg with flexibility to cover deviations in claims or volatile securities market conditions without having to realize losses in its investment portfolio. The company’s capitalization is supported further by a reinsurance program placed with highly rated entities.
During the past three years, Genseg’s operating performance has been limited by its underwriting results; 2022 presented a higher loss ratio than in 2021, mainly driven by the auto and agro business lines. Investment income could not offset underwriting results, coupled with the strengthening of the company’s catastrophe reserves. As of September 2023, the company continues to adjust its underwriting to return to premium sufficiency levels. Additionally, AM Best will continue to monitor the relevance of investment income for the company’s net result.
Genseg continues with its comprehensive transformation project, which includes implementing a new core system, pricing and risk-assessment tools, digital platforms and products for agents and policyholders as part of its strategy to achieve premium sufficiency and increase its market scope.
The stable outlooks reflect Genseg’s capacity to maintain balance sheet strength stability, supported by the Peña Verde group, amid the group’s evolving organizational structure.
Positive rating actions are not expected in the medium term; however, the balance sheet assessment could benefit from a revised risk appetite and growing capital base. Conversely, negative rating actions could occur if the support provided by its group, Peña Verde, S.A.B., weakens 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:
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