AM Best Affirms Credit Ratings of Grupo Mexicano de Seguros, S.A. de C.V.

AM Best has affirmed the Financial Strength Rating of A- (Excellent), the Long-Term Issuer Credit Rating of “a-” (Excellent) and the Mexico National Scale Rating (NSR) of “aaa.MX” (Exceptional) of Grupo Mexicano de Seguros, S.A. de C.V. (GMX) (Mexico). The outlooks of these Credit Ratings (ratings) are stable.

The ratings reflect GMX’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The stable outlooks reflect AM Best’s expectation that GMX will be able to maintain a profitable operation, characterized by premium sufficiency and prudent capital management.

GMX is a subsidiary of GMS Valore, S.A. de C.V., which provides GMX with synergies and operating efficiencies as a member of this group. The company initiated operations in Mexico City in 1998 and is a top player in Mexico’s property/casualty segment. The company’s chief business line is general and professional liability, operating mainly through a network of independent agents and promoters, as well as online sales.

GMX has strengthened its capital base consistently as a result of positive bottom-line results over the years, as well as an increasing catastrophe reserve. GMX’s risk-adjusted capitalization stands at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s balance sheet is further protected by a thorough reinsurance structure, which is placed with participants with an excellent level of security.

For over six years, GMX’s strong operating performance has been characterized by premium sufficiency on a large margin. Profitability has been achieved consistently through the company’s underwriting results and further enhanced by investment income, which has improved in recent years, as GMX’s achieves greater sophistication of its asset management and operations.

GMX’s management team has a solid track record of implementing strategies and taking advantage of opportunities for innovation in Mexico’s increasingly competitive insurance market, through their digital channels and technology capabilities.

Positive rating actions could occur if GMX is able to demonstrate stability in its risk-adjusted capitalization, through profitable results and prudent capital management. Factors that may lead to negative rating actions include a continued deterioration of underwriting results to a level that no longer supports the strong operating assessment and ultimately causes an erosion of the company's capital base, weakening its 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.

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