AM Best Information Services




DECEMBER 03, 2021 03:07 PM (EST)

AM Best Affirms Credit Ratings of General de Salud, Compañía de Seguros, S.A.


CONTACTS:
 Inger Rodríguez
Associate Financial Analyst
+52 55 1102 2720, ext. 108
inger.rodriguez@ambest.com

Eli Sanchez
Associate Director, Analytics
+52 55 1102 2720, ext. 122
eli.sanchez@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - DECEMBER 03, 2021 03:07 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 of “aaa.MX” (Exceptional) of General de Salud, Compañía de Seguros, S.A. (Gsalud) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

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

Gsalud’s balance sheet strength is supported by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), along with strong underwriting practices. The ratings also recognize Gsalud’s affiliation and strategic importance to its ultimate parent, Peña Verde, S.A.B., the leading group in Mexico’s insurance and reinsurance industries, which provides synergies and operating efficiencies. Offsetting these positive rating factors is Gsalud’s concentration in a single line of business in Mexico’s highly competitive health insurance market.

Gsalud is a fully owned subsidiary of General de Seguros, S.A.B. (Genseg) and is focused solely on health insurance. The company provides products mainly in the individual and collective health segments, as well as for major medical expenses. Gsalud has used the same distribution channels as Genseg, which involves agents, brokers and commercial offices.

Gsalud’s strongest level of risk-adjusted capitalization has been maintained despite an increased risk appetite, as reflected by a higher exposure to shares, which makes the company susceptible to equity risk. Historically, the company’s strong underwriting practices have resulted in positive technical performance with no dependence on investment revenue to achieve positive bottom line results. In 2020, Gsalud’s underwriting practices, coupled with investments results, sustained profitability, as reflected in its 14% return on equity. As of June 2021, COVID-19 related claims have impacted loss ratios; however, the company expects to close the year with profitable results, still underpinned by premium sufficiency, protected by the company’s excess of loss contracts.

The company benefits from being integrated into the Peña Verde, S.A.B. group, gaining operational advantage through common systems, procedures and ERM practices.

Gsalud is undergoing a comprehensive transformation project, which includes the implementation of a new core system, pricing and risk-assessment tools, digital platforms and products for agents and policyholders, as part of its strategy to strengthen its underwriting practices and increase its market scope.

The stable outlook reflects the company’s ability to maintain its risk-adjusted capitalization and balance sheet strength assessment while contributing to its group strategies and initiatives, supported by its profitable underwriting, despite the challenges that health insurance has faced since the pandemic started.

The company’s ratings could come under pressure if risk-adjusted capitalization weakens as a result of extensive capital outflows or a lack of underwriting discipline that generates negative technical results, causing the capital base to erode to a level no longer supportive of the current ratings. Negative rating actions also could take place 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:


  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Global BCAR (Version July 22, 2021)

  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

  • AM Best’s Ratings On a National Scale (Version Oct. 13, 2017)

  • Scoring and Assessing Innovation (Version March 5, 2020)

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: Nov. 5, 2020

  • Date Range of Financial Data Used: Dec. 31, 2015-June 30, 2021

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.

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.

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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.


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