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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 Upgrades Credit Ratings of Assurant Daños México, S.A. and Assurant Vida México, S.A.

February 28, 2019

MEXICO CITY--(BUSINESS WIRE)--Feb 28, 2019--AM Best has upgraded the Financial Strength Rating to A- (Excellent) from B++ (Good), the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” from “bbb+” and the Mexico National Scale Rating to “aaa.MX” from “aa+.MX” of Assurant Daños México, S.A. (ADM) and Assurant Vida México, S.A. (AVM). The outlook of these Credit Ratings (ratings) has been revised to stable from positive. Both companies are domiciled in Mexico City, Mexico.

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

The rating upgrades reflect balance sheet strength consistently maintained at strong levels. 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, as well as their respective risk-adjusted capitalization at the strongest level. The ratings also consider the strong reinsurance structure mainly supported by the group. Partially offsetting these positive rating factors are the small market share of both companies and the possibility of increasing competition within their niche markets.

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, telecom 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 in order to expand their market share in Mexico. Both subsidiaries also benefit from their group’s capital contributions, whenever required, in support of growth targets.

In 2018, ADM maintained its risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), at the strongest level, mainly supported by reinvestment of earnings. A further increase in ceded premium, derived from a material business, continued to pressure underwriting results; however, the company has sustained profitability, as demonstrated by a 7.9% return on equity at year-end 2018, partially supported by improvements in investment income. AM Best expects the company to maintain adequate retention levels supportive of profitability and risk-adjusted capitalization levels in the short to medium term.

In 2018, AVM’s risk-adjusted capitalization, as measured by BCAR, remained at the strongest level, mainly supported by positive bottom-line results. Despite past adjustments to the operating expense structure of the company, operating performance has remained at an adequate level, as reflected by a return on assets of 4.1% in 2018.

Factors that could lead to positive rating actions for ADM include improvements in operating performance, while maintaining risk-adjusted capitalization metrics at the strongest level. On the contrary, negative rating actions could take place if substantial deterioration of operating performance or aggressive growth in premiums lead to a drop in risk-adjusted capitalization to a level no longer supportive of the current ratings.

Positive rating factors that could lead to an upgrade for AVM’s ratings are sustained improvements in underwriting results that continue to strengthen its capital base and reduce its dependence on capital support from its group. Negative rating factors that could result in a downgrade include material deterioration in underwriting performance that results in a decline in risk-adjusted capitalization.

Negative rating actions also would occur if the subsidiaries’ parental support or their strategic importance to the group has deteriorated in AM Best’s view.

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/20190228005996/en/

CONTACT: Salvador Smith

Financial Analyst

+52 55 1102 2720, ext. 109

salvador.smith@ambest.comAlfonso Novelo

Senior Director, Analytics

+52 55 1102 2720, ext. 107

alfonso.novelo@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comJim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: MEXICO EUROPE CENTRAL AMERICA

INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE

SOURCE: AM Best

Copyright Business Wire 2019.

PUB: 02/28/2019 04:01 PM/DISC: 02/28/2019 04:01 PM

http://www.businesswire.com/news/home/20190228005996/en