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Best’s News & Research Service - August 17, 2017 11:38 AM (EDT)

A.M. Best Affirms Credit Ratings of HDI-Gerling de Mexico Seguros, S.A.

  • August 17, 2017 11:38 AM (EDT)
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Mexico City //BestWire// - A.M. Best has affirmed the Financial Strength Rating (FSR) of A (Excellent), the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” and the Mexico National Scale Rating of “aaa.MX” of HDI-Gerling de Mexico Seguros, S.A. (HDI-GM) (Mexico). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect HDI-GM’s substantial reinsurance support from its group through HDI Global Network AG (formerly known as HDI-Gerling Welt Service AG), which currently has a FSR of A (Excellent) and a Long-Term ICR of “a+”, as well as its integration with its ultimate parent company, HDI Haftpflichtverband der Deutschen Industrie V.a.G. (HDI V.a.G.) (see related press release), in terms of the business model and financial support consistently provided over the years.

HDI-GM is a subsidiary of HDI Global Insurance Company (99.9%) and HDI Global Network AG (0.1%), which are both subsidiaries of HDI V.a.G. The company’s business portfolio is distributed across fire (48%), liabilities (27%), marine (20%), and engineering risks (5%) as of December 2016. HDI-GM’s business model consists of very low retention, standing at 0.5% as of December 2016, which is completely supported by a facultative automatic reinsurance agreement provided by its affiliate and minority shareholder, HDI Global Network AG.

The company’s risk-adjusted capitalization is strong, as measured by Best’s Capital Adequacy Ratio (BCAR), and it has benefited from several capital contributions from the group, aimed to support its growth and to maintain adequate reserves and capital sufficiency. The last capital contribution materialized during 2015.

HDI-GM’s exposure to underwriting risks is limited through its reinsurance agreement with HDI Global Network AG, which also renders lower levels of required capital. However, large recoverables from reinsurance are reflected in in the assessment of its credit risk. A.M. Best does not consider this to be a major concern given the counterparty’s excellent level of security and the binding characteristics of the contract toward HDI-GM’s obligations.

During the past five years, the company has maintained positive bottom-line results despite volatility in its income statement derived from its small premium retention levels and non-recurrent events. This vulnerability has been offset by the support of its group through the commissions received by ceded reinsurance and by large reinsurance recoveries on claims.

A.M. Best expects HDI-GM’s performance to remain stable with the support provided by HDI V.a.G. and the binding characteristics of its reinsurance contract. If there are positive rating actions on the main operating subsidiaries of HDI V.a.G., as a result of demonstrating a track record of improved underwriting performance from its Retail Germany division, as well as from a strengthening of the risk-adjusted capitalization or a continued outperformance of its peer set, the global scale ratings on HDI-GM will move in tandem. Likewise, if there are negative rating actions on HDI V.a.G., as a result of a marked deterioration in operating performance or risk-adjusted capitalization, the ratings on the Mexican subsidiary will mirror those adjustments. Additionally, negative rating action could take place if HDI-GM’s reinsurance or capital support by its group deteriorates.

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 .

The following applied criteria supplemented the analysis of the ultimate rating unit:


  • A.M. Best’s Ratings On a National Scale (Version Sept. 5, 2014)

  • Analyzing Insurance Holding Company Liquidity (Version March 25, 2013)

  • Catastrophe Analysis in A.M. Best Ratings (Version Nov. 3, 2011)

  • Equity Credit for Hybrid Securities (Version April 2, 2014)

  • Evaluating Country Risk (Version May 2, 2012)

  • Insurance Holding Company and Debt Ratings (Version May 6, 2014)

  • Rating Members of Insurance Groups (Version Dec. 15, 2014)

  • Risk Management and the Rating Process for Insurance Companies (Version April 2, 2013)

  • Understanding Universal BCAR (Version May 1, 2017)

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: June 23, 2016

  • Date of Financial Data Used: Dec. 31, 2016

This press release relates to rating(s) that have been published on A.M. Best’s website. For additional 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.

A.M. Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. A.M. Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, A.M. Best cannot attest as to the accuracy of the information provided.

A.M. Best’s credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct. 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 the world’s oldest and most authoritative insurance rating and information source.



Mexico Property And Liability Insurers Property And Casualty Insurance Press Release Insurance Property And Casualty Insurers Best's Credit Rating Action


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