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PRESS RELEASE from provider: Business Wire
This content is a press release from our partner Business Wire. The AP newsroom and editorial departments were not involved in its creation.

AM Best Affirms Credit Ratings of Berkley International Seguros Mexico S.A.

March 6, 2019

MEXICO CITY--(BUSINESS WIRE)--Mar 6, 2019--AM Best has affirmed the Financial Strength Rating of A+ (Superior), the Long-Term Issuer Credit Rating of “aa-” and the Mexico National Scale Rating of “aaa.MX” of Berkley International Seguros Mexico S.A. (BSM) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

BSM is a member of W. R. Berkley Insurance Group (Berkley group), which on a consolidated basis, has a balance sheet strength that AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The ratings of BSM reflect its affiliation with its parent company, W. R. Berkley Corporation (W. R. Berkley), in terms of underwriting, reinsurance protection, ERM and capital commitments. Limiting the ratings is the inherent risk of a startup company implementing its business plan and the potential for volatility in Mexico’s economy during 2019.

BSM was formed in November 2016, and is the Mexico subsidiary of W. R. Berkley; the company received regulatory approval for operations in June 2017 and issued its first premium in July of that year. The company offers a diversified slate of property/casualty products strongly backed up by treaty and facultative reinsurance contracts with its parent company.

BSM’s solid risk-adjusted capitalization is derived from its strong capital position, in support of its premium growth during its initial years of operation. This was further strengthened by the 95/5 percent quota share and excess of loss contracts provided by its parent. Furthermore, AM Best recognizes W. R. Berkley’s commitment to its subsidiaries through additional capital fungibility to the Mexico operation.

As a newly formed company, BMS will have to produce sufficient volume to compensate for its fixed costs, while posting adequate underwriting performance on its retained premium. While BSM’s management and underwriting team have a successful track record of its own, the business plan implementation has to evolve for AM Best to adequately evaluate the company’s operating performance.

The Mexico property/casualty insurance sector experienced a decline during 2018, and further hurdles may arise due to changes in the economic environment as a result of the new government, which could cause potential volatility in 2019, and hamper the company’s growth prospects.

If there are positive rating actions on the main operating subsidiaries of the Berkley group, as a result of a substantial and sustained improvement in its operating performance metrics relative to its peers, the ratings of BSM likely would move in tandem. Likewise, if there are negative rating actions on the Berkley group, as a result of a sustained deterioration in the group’s underwriting or operating results, driven by either current accident year results or adverse development of prior years’ loss reserves, or as a result of a change in the financial position of the group’s holding company that results in the withdrawal of capital from the group or which causes an increase in financial leverage or decline in interest coverage at the holding company that is not supportive of the current ratings, the ratings of BSM would mirror those same actions.

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 Understanding Best’s Credit Ratings . For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases .

AM 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 © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190306005645/en/

CONTACT: Olga Rubo

Associate Financial Analyst

+52 55 1102 2720, ext. 134

olga.rubo@ambest.com

Alfonso Novelo

Senior Director, Analytics

+52 55 1102 2720, ext. 107

alfonso.novelo@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: UNITED STATES MEXICO EUROPE NORTH AMERICA CENTRAL AMERICA

INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE

SOURCE: AM Best

Copyright Business Wire 2019.

PUB: 03/06/2019 12:39 PM/DISC: 03/06/2019 12:39 PM

http://www.businesswire.com/news/home/20190306005645/en