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AM Best Withdraws Credit Ratings of Aseguradora Patrimonial Vida, S.A. de C.V.

December 19, 2019 GMT


AM Best has affirmed the Financial Strength Rating of C++ (Marginal), the Long-Term Issuer Credit Rating of “b+” and the Mexico National Scale Rating of “bbb.MX” of Aseguradora Patrimonial Vida, S.A. de C.V. (Patrimonial Vida) (Mexico). The outlook of these Credit Ratings (ratings) remains stable. Concurrently, AM Best has withdrawn the ratings as the company has requested to no longer participate in AM Best’s interactive rating process.

The ratings reflect Patrimonial Vida’s balance sheet strength, which AM Best categorizes as weak, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

Patrimonial Vida’s balance sheet strength is underpinned by its risk-adjusted capitalization at a weak level, as measured by Best´s Capital Adequacy Ratio (BCAR). The ratings also reflect the company´s significant underwriting leverage, business profile limited by concentration in a single business line and distribution channel, and the company’s relatively small size within Mexico’s life insurance industry. Partially offsetting these factors are Patrimonial Vida´s consistent profitability and well-structured reinsurance program.

Patrimonial Vida initiated operations in Mexico City in 2014, providing short-term life insurance coverage for the private and public sectors. As of year-end 2018, the company held a 0.4% market share in the life segment. Patrimonial Vida operates for the most part through a network of agents.

AM Best expects improvements in the company’s risk-adjusted capitalization to remain supported over the long term through stable sums assured retention levels and continuous expansion of Patrimonial Vida´s capital base, consistently supported by positive bottom-line results. Additionally, positive results have reflected gradual improvements in Patrimonial Vida´s underwriting leverage and further efficiency in capital management. The company has a considerable dependence on reinsurance, but it is well-supported by an adequately structured program placed with highly rated entities.

In AM Best´s view, the insurer was able to achieve rapid premium expansion while maintaining profitable underwriting practices in 2017, as reflected by premiums sufficiency levels. Moreover, the company´s conservative investment strategy has provided a steady flow of revenues, which in conjunction with technical results, have maintained profitability, as reflected by a 2.5% return on assets and 25% return on equity at year-end 2018.

AM Best expects Patrimonial Vida to further strengthen its ERM framework through improvements in systems, an embedded value tool and an internal economic capital model.

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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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PUB: 12/19/2019 03:10 PM/DISC: 12/19/2019 03:10 PM