AM Best Assigns Credit Ratings to Momento Seguros, S.A de C.V.
April 16 2024 - 3:06PM
Business Wire
AM Best has assigned a Financial Strength Rating of B
(Fair) and a Long-Term Issuer Credit Rating of “bb+” (Fair) and a
Mexico National Scale Rating (NSR) of “a+.MX” (Excellent) to
Momento Seguros, S.A de C.V. (Momento) (Mexico). The outlook
assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Momento’s balance sheet strength, which AM
Best assesses as strong, as well as its adequate operating
performance, limited business profile and marginal enterprise risk
management (ERM).
Momento is a Mexican insuretech established on the idea of
starting an insurance company with technological advantages in
contrast to other traditional companies, which started operations
in July 2023. The company´s underwriting is concentrated in
personal motor businesses in Mexico City, causing its business
profile to be considered as limited. AM Best will monitor how
products offered and its geographical presence expand as Momento’s
business plan evolves, but AM Best does not expect its business
profile assessment on the insurer to shift over the medium
term.
Momento’s balance sheet strength assessment of strong reflects
its capital size in contrast to its risk exposure, characterized by
its low business retention, conservative investment portfolio and a
superior security level in the participants of its reinsurance
program. Conversely, Momento´s material premium growth prospects in
a very competitive market, such as the auto segment, could put
pressure on capital adequacy levels, as measured by Best’s Capital
Adequacy Ratio (BCAR), in the medium term if there are important
deviations from its business plan or projected capital infusions.
However, mitigating this aspect, the company’s partners have
demonstrated their commitment through capital injections to sustain
Momento’s business operations.
Momento has defined policies and procedures for its investments
and underwriting practices that are attached to its risk tolerance.
However, AM Best considers that there is a high execution risk
attached to Momento´s business plan, considering its short track
record, as well as the market dynamics of the auto segment.
Therefore, AM Best’s ERM assessment is marginal.
Operating performance is considered adequate given the company’s
recent foundation and its expectation to breakeven by 2026. AM Best
will monitor the company’s operating results, and if there are
sizeable deviations from current projections, AM Best could revise
the impact of this building block in the short term.
The stable outlooks reflect AM Best’s expectation that Momento
will adequately manage its capital base to consistently face its
risks as the strategy and experience of the company evolves.
Positive changes in the ratings could take place as a result of
a thorough implementation of the ERM framework in order to mitigate
Momento’s implementation risk. Conversely, negative rating actions
could take place if there are shortfalls in the implementation of
the strategy deriving in a material weakening of the company’s
balance sheet strength.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all 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. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best’s Credit Ratings. 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. For more information,
visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Juan Pablo Castro Associate Financial Analyst
+52 55 1102 2720 ext. 133 juanpablo.castro@ambest.com
Alfonso Novelo Senior Director, Analytics +52 55
1102 2720 ext. 107 alfonso.novelo@ambest.com Christopher
Sharkey Associate Director, Public Relations +1 908
882 2310 christopher.sharkey@ambest.com Al Slavin
Senior Public Relations Specialist +1 908 882 2318
al.slavin@ambest.com