A.M. Best Assigns Ratings to Atradius, Seguros de Crédito, S.A.

A.M. Best has assigned a financial strength rating of A (Excellent), an issuer credit rating (ICR) of “a” and a Mexico National Scale Rating of “aaa.MX” to Atradius, Seguros de Crédito, S.A. (Atradius) (Mexico City, Mexico). The outlook for all ratings is stable.

The ratings on the Mexican subsidiary reflect its strategic importance to the Atradius group given its leading position within the credit insurance segment in Mexico, its importance as a gateway to the Latin American market, good financial flexibility derived from its strong capitalization, supportive reinsurance provided by the group and its seasoned management team. These positive factors are mitigated by intrinsic volatility of the credit insurance market, and thus, the unstable behavior of its net income.

The company benefits from its integration within the Atradius group, leveraging its operation on the same practices and procedures, reinsurance, draft facilities and underwriting selection. In addition, enterprise risk management (ERM) practices show a high level of integration with its parent company.

Atradius Mexico offers credit insurance in the Mexican market, and is ranked as the largest credit insurer in the country as of September 2014. The three largest participants in this line of business hold 91% of the premiums. Atradius Mexico is the oldest credit insurer in Mexico.

The good, although volatile financial performance of Atradius Mexico is supported by effective collection practices and adequate expense controls. Additionally, financial information and collections services offered by the group will continue to enhance the performance in bottom line results.

Capitalization and financial flexibility for Atradius Mexico are very strong, and A.M. Best expects it to remain at such levels, according to Best’s Capital Adequacy Ratio. Atradius Mexico’s reinsurance program is completely placed with Atradius Re, which currently holds an “a” ICR, further demonstrating the support received by the group.

If there are positive rating actions on the main operating subsidiaries of Atradius N.V., the global scale ratings on Atradius Mexico will move in tandem. Likewise, if there are negative rating actions on Atradius group, the ratings on the Mexican subsidiary will mirror the same adjustments. Additionally, if A.M. Best’s view on the subsidiary’s strategic importance to the group deteriorates, the ratings will also be negatively affected.

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 Ratings On a National Scale
• Catastrophe Analysis in A.M. Best Ratings
• Evaluating Country Risk
• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance Companies
• Understanding Universal BCAR

Click here for 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.

• Previous Rating Date: Not previously assigned.
• Date of Financial Data Used: Sept. 30, 2014

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 visit A.M. Best’s Ratings & Criteria Center.

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