AM Best


A.M. Best Assigns Credit Ratings to MAPFRE Fianzas, S.A.


CONTACTS:

Elí Sánchez
Senior Financial Analyst
+52 55 1102 2720, ext. 108
eli.sanchez@ambest.com

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - NOVEMBER 10, 2017 10:01 AM (EST)
A.M. Best has assigned a Financial Strength Rating of A (Excellent), a Long-Term Issuer Credit Rating of “a” and a Mexico National Scale Rating of “aaa.MX” to MAPFRE Fianzas, S.A. (MF) (Mexico City, Mexico). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings of MF recognize its status as a group member of MAPFRE S.A., the leading insurer in Spain, as well as the synergies and operating efficiencies derived from this affiliation. The ratings also reflect MF’s role as a complementary business line of MAPFRE MÉXICO S.A. (MM), good risk-adjusted capitalization, improved profitability as of December 2016 and solid reinsurance program. Partially offsetting these positive factors are the company’s exposure to contingent claims and low participation within the surety market.

While MF is a legal subsidiary of MM, its strategy and operations are directed as a boutique business line focused on maintaining market presence and complimenting the services provided by its immediate parent. The company is the 10th largest surety writer in Mexico based on gross premium written, with its portfolio composed of 91% administrative, 5% judicial, 3% fidelity and 1% credit. MF’s corporate practices are in line with MM and MAPFRE S.A.

MF’s risk-adjusted capitalization remained strong in 2016 due to its profit retention and good operating performance during the year; however, it remains exposed to business risk derived from contingent claims that represented 15.9% of its reported surplus. This exposure could lead to unexpected impacts on profitability and deterioration of its capital base. Such scenarios have been incorporated into the rating and present a key point to review in coming years. The company’s relatively low premium volume makes it vulnerable to adverse market conditions and claims deviations, which limits A.M. Best’s view of the ratings. However, A.M. Best’s view is partially offset by the appropriate reinsurance program provided by MF’s affiliates, MAPFRE RE, Compañía de Reaseguros, S.A. and MAPFRE GLOBAL RISKS, Compañía Internacional de Seguros y Reaseguros S.A.

For 2016, MF generated a 20.4% growth rate, which was well above the industry composite. MF also improved its bottom line results more than in previous years due to lower administrative costs and better investment income, resulting in a 35.9% return on premium, its highest level in the past four years.

Positive rating actions on its ultimate parent, MAPFRE S.A., could also result in positive rating actions on MF. Negative rating actions could occur if MF’s profitability is affected by material contingent claims or a higher cost structure that erodes its level of risk-adjusted capitalization to a level that no longer supports the current ratings. In addition, negative rating actions on its ultimate parent could result in a downward movement of MF’s 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:


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

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

  • Rating Surety Companies (Version Oct. 13, 2017)

  • Understanding Universal BCAR (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: Sept. 21, 2017 (affirmation and withdrawal)

  • Date of Financial Data Used: Sept. 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.


Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.