OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a financial strength rating of B++ (Good) and an issuer credit rating of “bbb+” to General de Seguros, S.A.B. (GENSEG) (Mexico). The outlook assigned to both ratings is stable.
The ratings reflect GENSEG’s profitable net results and strong risk-based capitalization, as well as its experienced management team. GENSEG’s consistent levels of positive investment income have resulted in historically favorable earnings that have enabled it to continue to increase its level of surplus. GENSEG’s financial strength is further enhanced by its comprehensive reinsurance program and adequate liquidity and solvency metrics.
Based on Best’s Capital Adequacy Ratio (BCAR), GENSEG's capitalization is at an adequate level to support its assets and underwriting risks. GENSEG’s profitability is complemented by consistent levels of investment income, which have enabled it to steadily increase surplus.
Partially offsetting these positive rating factors is GENSEG’s limited financial flexibility, geographic concentration of its business exclusively in Mexico and losses stemming from its property/casualty book of business. GENSEG’s business concentration makes it vulnerable to regulatory, economic and political influences and volatility; the company mitigates that risk as a multiline insurer. Moreover, GENSEG will remain challenged to increase its market share while generating consistent earnings in a very competitive and maturing market. Also, the frequency of catastrophic events in Mexico presents a substantial level of risk exposure to GENSEG as it formalizes its risk management program.
While A.M. Best believes GENSEG’s ratings and outlook are well positioned at the current level, factors that may trigger positive rating actions include underwriting and operating results improving and consistently performing in line with higher rated peers. The organization’s ratings could come under pressure should the continued soft market conditions and a lack of underwriting discipline result in its underwriting and overall profitability underperforming expectations; local legislative/regulatory or economic changes adversely affect the company’s operating fundamentals; or capitalization does not meet rating parameters.
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.
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