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BEST'S CREDIT RATING ACTION

Best’s News & Research Service - February 25, 2021 02:47 PM (EST)

AM Best Affirms Credit Ratings of Virginia Surety Seguros de México, S.A. de C.V.

  • February 25, 2021 02:47 PM (EST)
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Mexico City //BestWire// - AM Best has affirmed the Financial Strength Rating of A-(Excellent), the Long-Term Issuer Credit Rating of “a-” and the Mexico National Scale Rating of “aaa.MX” of Virginia Surety Seguros de México S.A. de C.V. (VSSM) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

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

The ratings also reflect the company’s balance sheet strength assessed at a strong level since it began operations in Mexico. The ratings of VSSM also factor its recent affiliation and strategic importance to Assurant, Inc., the ultimate parent, as well as its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Partially offsetting these positive rating factors is the company’s small market share, coupled with its startup nature.

VSSM is a subsidiary of Virginia Surety Company, Inc., a general underwriting entity part of The Warranty Group, Inc. In 2017, The Warranty Group, Inc. completed a merger agreement with Assurant Inc., with the purpose of combining insurance operations in various jurisdictions, including the operation in Mexico. VSSM started operations in Mexico in January 2017, underwriting premiums in the property/casualty segment, focused in the auto insurance line of business and other miscellaneous lines of business.

VSSM underwrites specialty products, providing coverage for risks that usually are not underwritten in the traditional automobile insurance. In its miscellaneous lines of business, VSSM mainly offers coverage in case of theft or accidental damage for consumer technology products, such as cell phones, photographic and sound equipment and home appliances. VSSM places its products through its network of business partners, which include manufacturers, distributors and retailers.

VSSM operates under the same management as Assurant Daños México, S.A. and Assurant Vida México, S.A, subsidiaries of Assurant Inc. These companies operate separately but they do not compete against each other; moreover, VSSM takes advantage of the operational synergies derived from being part of the Assurant Group. In 2019, for the first time in its three years of operations, VSSM achieved positive bottom-line results, backed by investment results. As of November 2020, VSSM has been able to maintain profitability, still underpinned by investment income.

Factors that could lead to positive rating actions for VSSM include consistent improvements in operating performance, while maintaining risk-adjusted capitalization metrics at the strongest level. Conversely, negative rating actions could take place if operating performance substantially deteriorates or if an aggressive growth in premium leads to a drop in risk-adjusted capitalization to a level no longer supportive of the current ratings.

Negative rating actions also would occur if VSSM’s parental support or its strategic importance to the group deteriorates in AM Best’s view.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM 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:


  • AM Best Ratings On a National Scale (Version Oct. 13, 2017)

  • Available Capital and Holding Company Analysis (Version Oct. 13, 2017)

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

  • Understanding Universal BCAR (Version June 11, 2020)

  • Rating New Company Formations (Version Oct. 13, 2017)

  • Scoring and Assessing Innovation (Version March 5, 2020)

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 Guide to Best’s Credit Ratings.


  • Previous Rating Date: Feb. 26, 2020

  • Date Range of Financial Data Used: Dec. 31, 2014- Nov. 30, 2020

This press release relates to rating(s) that have been published on AM 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 AM Best’s Recent Rating Activity web page.

AM 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. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM 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. AM 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.

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



Mexico Surety Financial Strength Latin America Press Release A.M. Best Rating Services, Inc. Insurance Best's Credit Rating Action Issuer Credit Rating Subsidiaries


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