A.M. Best has upgraded the Financial Strength Rating to A-
(Excellent) from B++ (Good), the Long-Term Issuer Credit Rating to “a-”
from “bbb+”, and the Mexico National Scale Rating (NSR) to “aaa.MX” from
“aa+.MX" of General de Seguros S.A.B. (Genseg) (Mexico City, Mexico).
The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Genseg’s balance sheet strength, which A.M. Best
categorizes as strongest, as well as its marginal operating performance,
neutral business profile and appropriate enterprise risk management
The rating upgrades reflect Genseg’s balance sheet strength that is
underpinned by risk-adjusted capitalization at the strongest level, as
measured by Best’s Capital Adequacy Ratio (BCAR), improving underwriting
results, consistent inflow of investment income, experienced management
team and solid reinsurance program. 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 (re)insurance industry, which
provides synergies and operating efficiencies. Partially offsetting
these positive rating factors is the strong competitive landscape in its
main business lines. Genseg initiated operations in Mexico City in 1970.
The company mainly underwrites motor, agriculture and life insurance.
The company ranked as Mexico’s 26th largest insurer in 2017 with a
market share of 0.57%. Genseg operates with a network of independent
agents, brokers and commercial offices throughout Mexico.
The company has increased capital and surplus consistently at a compound
annual growth rate of 5.7% over the past five years. The company’s
capitalization is further supported by a reinsurance program with highly
rated entities. The company’s capitalization and liquidity have provided
Genseg with flexibility in order to cover deviations in claims or
volatile securities market conditions without having to realize losses
in its investment portfolio. In 2017, Genseg’s profitability continued
to depend on investment income.
Moreover, stable claims containment within Genseg´s motor insurance
line, coupled with positive effects of reserves release derived from the
implementation of Solvency II-type regulation, continue to improve
underwriting practices and have positively impacted operating
performance as reflected by combined ratios converging towards 100% at
year-end 2017. A.M. Best expects Genseg to sustain this trend through
year-end 2018, despite challenges arising from a very competitive and
Factors that may trigger positive rating actions include stable
profitability metrics performing in line with higher rated peers and
good short-term performance in its motor business. The company’s current
ratings could come under pressure should soft market conditions continue
and if a lack of underwriting discipline generates results and overall
profitability that fall short of A.M. Best’s expectations or if
capitalization is no longer supportive of the current ratings.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
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:
A.M. Best´s Ratings on a National Scale (Version Oct. 13, 2017)
Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
Catastrophe Analysis in A.M. Best Ratings (Version Oct. 13, 2017)
Evaluating Country Risk (Version Oct. 13, 2017)
Understanding Universal BCAR (Version May 14, 2018)
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 Understanding
Best’s Credit Ratings.
Previous Rating Date: Oct. 5, 2017 (FSR and Long-Term ICR); Oct. 13,
Date of Financial Data Used: June 30, 2018
This press release relates to Credit Ratings that have been published
on A.M. 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 A.M. Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases.
A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
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