AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior), the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa+” (Superior) and the Mexico National Scale Rating of “aaa.MX” (Exceptional) of Seguros Monterrey New York Life, S.A. de C.V. (SMNYL) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect SMNYL’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

The ratings also reflect SMNYL’s strong integration with its parent company, New York Life Insurance Company (New York Life), which has an FSR of A++ (Superior) and a Long-Term ICR of “aaa” (Exceptional), as well as risk-adjusted capitalization assessed at the strongest level, robust ERM, sound operating performance and a highly competitive position in Mexico’s life insurance segment. Partially offsetting these positive rating factors are SMNYL’s challenging expansion strategy within Mexico’s very competitive market amid volatile economic conditions.

SMNYL is the Mexico-based subsidiary of New York Life following its acquisition of Seguros Monterrey in 2000. SMNYL, established in Mexico in 1940, mainly underwrites life insurance products through a solid agent network. As of September 2024, SMNYL was Mexico’s fifth-largest insurer, with a market share of 7.6% in the country’s life and health segment. The company’s product portfolio is composed of individual life (63%), individual medical expenses (24%), group medical expenses (11%) and group life (2%).

SMNYL benefits from its ultimate parent’s strong brand recognition. In addition, SMNYL’s integration within the group is key to the group’s rating levels, as New York Life actively supervises SMNYL’s strategy and operations, further enhancing its corporate governance and product innovations. Within New York Life’s international structure, SMNYL stands out as one of the most significant in terms of its good profitability and market presence, which makes this subsidiary’s operation and strategy very likely to be supported by the group, if required.

The company grew profitably in 2023-2024, with its strategy driven by results and cost efficiencies, allowing it to sustain a healthy capital position. AM Best expects SMNYL to maintain its trend of positive results, as it benefits from increased FX and stable investment yields. Additionally, SMNYL has adjusted its commercial efforts in conjunction with emerging opportunities in the challenging individual life segment. Due to the company’s robust ERM and corporate governance capabilities, AM Best believes that SMNYL has sufficient technical tools and market expertise to achieve an adequate balance between growth and profitability. The company has maintained an adequate investment portfolio to support its asset-liability matching.

SMNYL’s risk-adjusted capitalization is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and supported by reported strong net income, despite significant dividend payments in 2023, which did not materially affect AM Best’s view of the company’s risk-adjusted capitalization. AM Best expects that SMNYL’s capital management capabilities will continue to benefit base capital through strong net income and immaterial dividend payments. Due to the nature of the life insurance business and its investment components, SMNYL is susceptible to changes in interest rates. However, adjustments to the company’s investment portfolios are focused on maintaining credit quality and asset-liability matching within the group’s guidelines.

AM Best considers SMNYL to be well positioned at its current rating levels; nonetheless, positive rating actions could occur if AM Best's view of the strategic importance of the company to its group increases. Negative rating actions could occur if large capital outflows occur, or operating performance weakens and impacts the company’s balance sheet strength in the medium term. Furthermore, negative rating actions could result if AM Best’s view on the strategic importance of the Mexico-based subsidiary to its group decreases or if there are negative rating actions on New York Life.

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AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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