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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - SEPTEMBER 22, 2003 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of Grupo Nacional Provincial S.A. (GNP) (Mexico). The rating outlook is stable.
The rating considers GNP's excellent financial strength, its leading position in the Mexican market and its conservative operating philosophy. The rating also considers the company's disciplined underwriting practices, good product diversification and successful distribution strategies. Offsetting these positive factors are rising reinsurance costs and increased competition from foreign insurers.
GNP is one of the leading insurance companies in Mexico on a gross premium basis and is a member of Grupo Bal, one of the largest local business conglomerates. GNP has a solid investment portfolio backing its technical and contingency reserves. Furthermore, it practices prudent asset-to-liability matching financial techniques to minimize exposures, especially in its life business. The company is in the process of implementing new information systems, which would result in significant improvement in efficiency and data management capabilities. However, a rise in reinsurance costs due to hardening of the reinsurance market will challenge profitability in the near term. Moreover, the local market has turned highly competitive with the increased presence of foreign insurers, offering new challenges for GNP to sustain and/or
increase market share.
A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source.