AM Best


A.M. Best Affirms Ratings of Seguros Inbursa S.A. Grupo Financiero Inbursa


CONTACTS:

Salvador Smith
Associate Financial Analyst
+52 55 1102 2720, ext. 109
salvador.smith@ambest.com

Alfonso Novelo
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
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - AUGUST 26, 2016 02:28 PM (EDT)
A.M. Best has affirmed the financial strength rating (FSR) of A (Excellent), the issuer credit rating (ICR) of “a” and the Mexico National Scale Rating (NSR) of “aaa.MX” of Seguros Inbursa S.A. Grupo Financiero Inbursa (Seguros Inbursa) (Mexico). The outlook of the FSR and the NSR are stable while the outlook for the ICR remains positive.

The ratings reflect Seguros Inbursa’s excellent capitalization and consistent earnings and profits supported by a stable flow of investment income, along with low underwriting leverage, a diversified business profile and the company’s affiliation with Grupo Financiero Inbursa S.A.B. de C.V. (Grupo Financiero Inbursa), one of the largest financial groups in Mexico. The ICR outlook of positive reflects the stable and favorable trends in revenues and capital growth.

Seguros Inbursa writes life and non-life business and remains one of the largest and most profitable domestic insurance companies in Mexico. Miscellaneous insurance was one of the company’s top performing business lines in 2015, a line of business that currently represents 20% of gross written premiums. The company has shown disciplined underwriting in a highly competitive market, consistently reporting overall premium sufficiency levels that compare positively among its closest competitors. Seguros Inbursa maintained high claims volume during 2015; however, the company’s strong underwriting policies helped to maintain its combined ratio below the 100% threshold, standing at 95.2% in 2015. A.M. Best expects the good underwriting performance to continue in 2016.

Historically, the company has operated with low underwriting leverage. Seguros Inbursa’s risk-based capitalization remains fully supportive of its current ratings. Adjusted capital has grown at a compound annual growth rate of 10% during the past five years, and A.M. Best expects this trend to continue as a result of sound underwriting, conservative reserves, dividends and investment policies, as well as an effective cost containment strategy. In addition, Seguros Inbursa continues to benefit from and the significant operating efficiencies afforded by Grupo Financiero Inbursa’s vast financial and system networks.

Partially offsetting these positive rating factors is the strong competitive environment within the Mexico’s insurance market, which A.M. Best believes could pressure the profitability and market share of the company.

Key rating drivers that could lead to positive rating actions for Seguros Inbursa include continued favorable trends in profitability and capital growth. Conversely, a sharp deterioration in underwriting results or a significant weakening of its capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), could trigger negative rating actions.

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 Sept. 5, 2014)

  • Catastrophe Analysis in A.M. Best Ratings (Version Nov. 3, 2011)

  • Evaluating Country Risk (Version May 02, 2012)

  • Rating Members of Insurance Groups (Version Dec. 15, 2014)

  • Risk Management and the Rating Process for Insurance Companies (Version April 2, 2013)

  • Understanding Universal BCAR (Version April 28, 2016)

View a general description of the policies and procedures used to determine credit ratings. Also in accordance with Mexican regulations, the following is a link to required disclosures – A.M. Best America Latina Supplementary Disclosure. For information on the structure, voting and the committee process for determining the ratings and monitoring activities please refer to “Understanding Best’s Credit Ratings.”


  • Previous Rating Date: June 12, 2015

  • Date of Financial Data Used: March 31, 2016

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.

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