AM Best has affirmed the Financial Strength Rating of A (Excellent), the Long-Term Issuer Credit Rating of “a+” (Excellent) and the Mexico National Scale Rating of “aaa.MX” (Exceptional) of MAPFRE México, S.A. (MM) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.
MM is a member of MAPFRE S.A., which on a consolidated basis has a balance sheet strength that AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).
MM’s ratings also reflect its strategic importance to and alignment with MAPFRE Internacional S.A., as well as the synergies and operating efficiencies derived from being a group member of MAPFRE S.A., the leading insurer in Spain.
MM’s ratings are derived from its solid risk-adjusted capitalization and underwriting strategy, as well as its competitive position in Mexico’s insurance industry and appropriate ERM practices. Partially offsetting these positive rating factors are uncertain prospective opportunities for growth in Mexico’s unwinding economy that has been slowing since 2018.
MM operates as a composite insurer of life and non-life business and ranks among the top 10 largest insurers in Mexico, based on gross written premium (GWP).
MM’s GWP has presented stable growth after adjusting for the biannual property-liabilities policy of Petróleos Mexicanos, a state-owned oil and gas company that MM started underwriting in 2015 and renewed in 2019, 2021 and 2023 the latter for more than USD 676 million.
Despite underwriting losses since 2021 driven by life business, MM continues adjustments in claims controls and pricing done within its main segments, in conjunction with contained acquisition expenses. Financial income continued to influence the net result positively, which for 2022 was MXN 278 million.
The very strong assessment for MM’s balance sheet strength, as measured on a consolidated basis, remains slightly dependent upon dividend payments to its holding company. In the medium term, AM Best expects MM’s continued fine-tuning in underwriting strategy to enhance net results, and therefore, the continued expansion of its capital base.
MM’s ERM practices are well-established and implemented throughout the company and closely follow those set by MAPFRE S.A. This integration has benefited the company’s implementation of Mexico’s Solvency II-type regulations.
If there are negative rating actions on the MAPFRE group, as a result of a sustained decline in operating performance below, AM Best’s expectation for the strong assessment level, or a sustained deterioration in MAPFRE S.A.’s consolidated risk-adjusted capitalization, the ratings of MM would mirror those same actions.
A change in AM Best’s perception regarding the actual or perceived level of MM’s strategic importance to the MAPFRE group also could impact the company’s ratings.
The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Nov. 13, 2020), which provides a comprehensive explanation of AM 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:
- AM Best´s Ratings On a National Scale (Version June 15, 2023)
- Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
- Catastrophe Analysis in AM Best Ratings (Version March 10, 2023)
- Evaluating Country Risk (Version May 4, 2023)
- Scoring and Assessing Innovation (Feb. 27, 2023)
- Understanding Global BCAR (Version July 6, 2023)
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, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best’s Credit Ratings.
- Previous Rating Date: Oct. 19, 2022
- Initial Rating Date: Oct. 22, 1999
- Date Range of Financial Data Used: Dec. 31, 2017-Dec. 31, 2022
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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