CONTACTS:
FOR IMMEDIATE RELEASE
MEXICO CITY - APRIL 12, 2024 03:01 PM (EDT)
AM Best has upgraded the Financial Strength Rating to B+ (Good) from B (Fair), the Long-Term Issuer Credit Rating to “bbb-” (Good) from “bb” (Fair) and the Mexico National Scale Rating (NSR) to “aa-.MX” (Superior) from “a.MX” (Excellent) of Armour Secure Insurance S.A. de C.V. (Armour) (Mexico). The outlook of these Credit Rating (ratings) has been revised to stable from positive.
The ratings reflect Armour’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management (ERM).
The rating upgrades reflect the stabilization in structure and capital management that followed the corrective actions taken on financial leverage at the holding company level, which was derived from changes in the organizational structure of the group.
The stable outlooks reflect Armour’s capability to maintain its balance sheet strength through profitable results.
The strong balance sheet assessment reflects Armour’s capital base, consistently strengthened through the reinvestment of earnings. Armour has been able to sustain a profitable domestic operation through its underwriting results, consistently reporting premium sufficiency that has benefited from efficiencies in management expenses in the last few years. Armour’s investment income is susceptible to foreign exchange volatility given its long position in U.S. dollars; however, technical results are sufficient to sustain profitability, offsetting any exchange losses.
Armour is the leader in Mexico’s title insurance market, holding over 70% of market share as of December 2023, with only one competitor. The company’s business profile is limited due to its concentration in a niche market.
AM Best’s view of the company’s ERM is marginal due to concerns regarding governance and
availability of information at its holding company, Trebuchet Group Holdings Limited.
Negative rating actions could take place if the company’s risk-adjusted capitalization weakens due to significant cash withdrawals or excessive premium growth, or if operating performance deteriorates to a point no longer supportive of its current assessment. Positive rating actions could occur if, in AM Best’s view, Armour and its holding company keep improving communication, demonstrating transparency and efficiency in information and processes.
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 www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
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.
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.