AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of Assurant Daños México, S.A. (ADM) and Assurant Vida México, S.A. (AVM). The outlook of these Credit Ratings (ratings) is positive. AM Best also has affirmed the Mexico National Scale Rating (NSR) of “aaa.MX” (Exceptional) of ADM and AVM. The outlook of the NSR is stable.

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

The positive outlook on the FSR and Long-Term ICRs reflect AM Best’s expectation that the company’s balance sheet strength will continue to improve, underpinned by positive bottom-line results. The ratings of ADM and AVM also reflect their affiliation and strategic importance to Assurant, Inc., the ultimate parent, as a stepping-stone to grow in the Latin America market. The ratings also consider the solid reinsurance structure mainly supported by the group. ADM and AVM initiated operations in 2004 and are owned by Assurant Holding Mexico, S. de R.L. de C.V., which is part of Assurant, Inc. Distribution for both companies is based on sales through financial institutions, auto companies, telecommunications carriers, retailers and other channels. ADM and AVM follow their group’s underwriting, ERM and corporate governance practices, receive reinsurance support and benefit from its brand recognition to expand their market share in Mexico. Both subsidiaries also benefit from their group’s capital contributions, when required, in support of growth targets.

In 2022-2023, ADM maintained its balance sheet strength at a strong level as the company continued to strengthen its capital base through the reinvestment of earnings. Premium growth during 2022 benefited from an improvement in sales in the company’s global auto, mobile, home, retail and original equipment manufacture business lines, as well as commercial alliances with high profile distributors. As of December 2023, ADM increased its profitability through positive technical and underwriting results and management expense control, which was supported by an increase in investment income, partially resulting from its strategic asset allocation.

AVM’s balance sheet strength also was at a strong level in 2022-2023, supported primarily by profitability. AVM’s underwriting results also benefited from a reserve release in 2023 mainly due to the annualization of its policies. The company presented positive bottom-line results as of December 2023, backed by profitable underwriting and strengthened by investment income.

Factors that could lead to positive rating actions for ADM and AVM include a sustained reinforcement of its strong balance sheet strength, underpinned by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and favorable operating performance. Conversely, negative rating actions could take place if operating performance substantially deteriorates, resulting in a decline in risk-adjusted capitalization to a level no longer supportive of the current ratings.

 

Fuente: AM Best

Enlace: www.ambest.com.