AM Best Assigns Credit Ratings to Seguros El Potosí, S.A.

MEXICO CITY--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of A- (Excellent), a Long-Term Issuer Credit Rating of “a-” (Excellent) and a Mexico National Scale Rating (NSR) of “aaa.MX” (Exceptional) to Seguros El Potosí, S.A. (El Potosí) (San Luis Potosi, Mexico). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect El Potosí’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The stable outlooks reflect the company’s ability to strengthen its capital base through positive bottom-line results in recent years, while implementing its business strategy in Mexico’s competitive insurance market.

El Potosí’s very strong balance sheet strength recognizes the company’s ability to strengthen its capital base to adequately match its obligations and risk appetite. The very strong assessment also recognizes the conservative profile of El Potosí’s investment portfolio and concentration in Mexico fixed income securities.

El Potosí has consistently posted positive bottom-line results; the company’s operating performance is characterized as being profitable, which has been achieved through technical results and propelled by investment income. AM Best expects El Potosí to maintain premium sufficiency levels while implementing its growth strategy.

AM Best assesses the company’s business profile as neutral; the company underwrites premiums across several states through a mix of distribution channels and has a diversified portfolio of products. However, underwriting risks are concentrated in Mexico. El Potosí’s ERM is considered appropriate, as it is well-integrated into its operations. The company has a sound reinsurance program in place with highly rated reinsures with an excellent level of security.

Positive rating actions could occur if El Potosí is able to demonstrate a consistent upward trend of positive bottom-line results, underpinned by favorable technical results and investment income, as well as stability in key operating metrics. Negative rating actions could occur should risk-adjusted capitalization deteriorate due to a significant cash withdrawal or a decline in operating results that ultimately translates into an eroded capital base.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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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