AM Best


A.M. Best Upgrades Issuer Credit Rating of Atradius Seguros de Crédito, S.A.


CONTACTS:

Olga Rubo
Associate Financial Analyst
+52 55 1102 2720, ext. 134
olga.rubo@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 - OCTOBER 19, 2018 02:31 PM (EDT)
A.M. Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” from “a” and affirmed the Financial Strength Rating of A (Excellent) and the Mexico National Scale Rating of “aaa.MX” of Atradius Seguros de Crédito, S.A. (Atradius Mexico) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

Atradius Mexico is a member of the Atradius group, which on a consolidated basis has a balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The Long-Term ICR upgrade reflects the track record of Atradius Mexico’s parent company, Atradius N.V., with respect to its strong operating performance across the underwriting cycle, demonstrated by a 10-year average combined ratio of 88% (2008-2017). A.M. Best expects continued strong earnings, together with clear capital management targets, to support risk-adjusted capitalization being maintained at the strongest level.

The ratings also reflect Atradius Mexico’s strategic importance to the overall Atradius group, given its leading position within the credit insurance segment in Mexico, its importance as a gateway to Latin America’s market, good financial flexibility derived from its strong capitalization, supportive reinsurance provided by the group and its seasoned management team. These positive rating factors are offset partially by volatility in the company’s net income due to the intrinsic volatility in the credit insurance market.

The company benefits from its integration within the Atradius group, which allows it to leverage operations on the same practices and procedures, reinsurance, draft facilities and underwriting selection. In addition, its ERM practices show a high level of integration to Atradius N.V.

Atradius Mexico offers credit insurance in its domestic market and was ranked as Mexico’s largest credit insurer as of December 2017. The three largest participants in this line of business hold more than 90% of the market share.

Atradius Mexico’s financial performance compares favorably with that of its peers in Mexico’s credit insurance industry, and it has posted better-than-average loss ratios due to its underwriting and collection practices. As of 2017, Atradius Mexico’s profitability continues to be supported by sound underwriting and expense control practices, steady investment income, and a high amount of commissions received by reinsurance, which translate into negative acquisition costs.

Atradius Mexico’s capitalization is very strong, as measured by Best’s Capital Adequacy Ratio (BCAR), and as a result, the company maintains significant financial flexibility. Furthermore, A.M. Best expects the company to sustain its capitalization level. Atradius Mexico’s reinsurance program is placed with Atradius Reinsurance Designated Activity Company, further demonstrating the support received by the group.

If there are positive rating actions on the main operating subsidiaries of Atradius N.V., as a result of a change in the key rating fundamentals of Atradius N.V.’s parent company, Grupo Catalana Occidente, S.A., the ratings of Atradius Mexico likely would move in tandem. Likewise, if there are negative rating actions on the Atradius group, as a result of a sustained decline in operating performance or a sustained deterioration in Atradius N.V.’s consolidated risk-adjusted capitalization, the ratings of Atradius Mexico would mirror those same actions.

A change in A.M. Best’s perception regarding the ability to deploy capital across the Atradius group of companies could impact Atradius Mexico’s inclusion in the group.

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:


  • Best’s Credit Rating Methodology (Version, Oct. 13, 2017)

  • Understanding Universal BCAR (Version, May 14, 2018)

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

  • A.M. Best’s Ratings On a National Scale (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. 28, 2017

  • Date of Financial Data Used: Dec. 31, 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 a global rating agency and information provider with a unique focus on the insurance industry.


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.