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Best’s News & Research Service - October 27, 2017 03:52 PM (EDT)

A.M. Best Affirms Credit Ratings of Armour Secure Insurance S.A. de C.V.

  • October 27, 2017 03:52 PM (EDT)
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Mexico City //BestWire// - A.M. Best has affirmed the Financial Strength Rating of B (Fair), the Long-Term Issuer Credit Rating of “bb” and the Mexico National Scale Rating of “a.MX” of Armour Secure Insurance S.A. de C.V. (Armour) (Mexico). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Armour’s strong risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), strong operating performance and solid reinsurance program. Considerably offsetting these positive factors are the high financial leverage and low capitalization of its holding company, Armour Group Holdings Limited, based on BCAR, which could pressure Armour’s financial flexibility. Also, despite being a market leader in its niche of title insurance, the company’s small market share in Mexico’s insurance industry and concentration in a single line of business mitigate this strength.

Armour was authorized in 2014 by the Mexican Minister of Finance after acquiring the former Fidelity National Title de Mexico, S.A. de C.V. The company underwrites only title insurance and is the market leader in terms of gross written premiums, in a non-saturated market that consists of two participants.

According to BCAR, Armour had a strong risk-adjusted capital position for year-end 2016, which is supported by positive bottom line results reflected in good and improving profitability metrics. The company’s strong underwriting results are directly linked to the favorable conditions in Mexico’s real estate market. In 2016, Armour’s operating performance was characterized by a combined ratio of 80.6% and a return on equity of 22.2%. Armour’s performance is in line with the title insurance industry, which is globally characterized by high operating expenses. Moreover, the company maintains an adequate reinsurance program placed entirely with a Lloyd’s syndicate.

Key rating drivers that could lead to positive rating actions for Armour include a considerable reduction in the financial leverage and improvements in the capitalization of its holding company. Key factors that could lead to negative rating actions include a sustained deterioration in operating performance resulting from adverse real estate market conditions or a significant decline in its risk-adjusted capitalization to levels 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:


  • Best’s Credit Rating Methodology (Version Oct. 13, 2017)

  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Rating Title Insurance Companies (Version Oct. 13, 2017)

  • Understanding Universal BCAR (Version Oct. 13, 2017)

  • A.M. Best’s Ratings On a National Scale (Version Oct. 13, 2017)

  • Available Capital & Holding Company Analysis (Version Oct. 13, 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: July 29, 2016

  • Date of Financial Data Used: June 30, 2017

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 Latin America Press Release Insurance Best's Credit Rating Action


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