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FOR IMMEDIATE RELEASE
OLDWICK - JUNE 27, 2014 02:56 PM (EDT)
A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Grupo Nacional Provincial, S.A.B. (GNP) (Mexico). The outlook for both ratings is stable.
The rating actions reflect GNP's leading position in the Mexican insurance market, recent improvements in the operating results of the auto segment, its diversified business profile and historically profitable overall operating performance. GNP also maintains a conservative valuation policy reserve and high adequacy level of capital according to Mexican regulations.
The ratings of GNP also recognize its supportive risk-adjusted capitalization and consistent growth in embedded valued and improved lapse experience. GNP's embedded value has grown consistently over the review period, and together with growth in its appraisal value, is reflective of contributions to shareholder value of existing and future new business.
Partially offsetting these positive rating factors are GNP's continued elevated underwriting leverage to stockholder' equity, its volatile underwriting and net earnings performance by segment in recent years.
GNP is the largest domestic insurance company in Mexico as measured by direct premiums written. The company operates as a composite insurer of life and non-life business with core business segments in life, health and automobile coverage.
A.M. Best believes GNP's ratings are well positioned in the near-to medium-term, based on its current financial strength and risk management profile.
Potential positive rating triggers would include sustained improvement in GNP's underwriting results in conjunction with the expected improvements in Mexico's regulatory environment. Possible negative rating triggers could include deterioration in the company's underwriting results, and consequently, a decline in its risk-based capitalization.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best's Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
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.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.