A.M. Best Co. has affirmed the “A” (Excellent) rating of ING Comercial America Seguros and its wholly owned surety subsidiary ING Comercial America Fianzas—formerly Seguros Comercial America S.A. and Fianzas Comercial America respectively, Mexico.
The “under review” status of the rating has been removed. The rating was placed under review following the announcement in June 2001 by the ING Group that it would acquire the controlling interest of Seguros Comercial America (SCA), raising its total stake to 87 percent. Subsequently, ING bought the remaining 13 percent that was publicly traded, making SCA a fully owned subsidiary of ING Group.
Amsterdam-based ING Group, the ultimate parent of ING Comercial America Seguros and ING Comercial America Fianzas, is one of the largest integrated financial services organizations in the world. ING re-branded its retail operations in Mexico under the name ING Comercial America (ING-CA). The organization’s new name combined the brand equity of ING and SCA to form a united ING brand.
ING Comercial America Seguros is essential to the ING Group’s ongoing success and viability in Latin America, and is an integral part of its strategy. Furthermore, it has the explicit support of its parent and is well positioned to help the company compete in the local market.
ING Comercial America is the leading insurance company in Latin America on the basis of gross premiums written—US $2.1 billion. Property and casualty writings comprise about 60 percent of ING-CA’s book, represented mostly by short to moderate tail risks. Health (12 percent) and life (28 percent) individual and group annuities make up the remaining 40 percent.
Although the recent operating performance has been unrewarding as a whole, the company’s earnings are expected to improve, due to an increased new business volume combined with a diligent underwriting process and strong asset liability management capabilities. The business plan projects reasonable volume and capital levels to support its insurance and surety operations over the short- to medium-term.
The rating has also been affirmed because of the recent US $287 million increase of capital accomplished in October 2002. The rating level will be contingent upon execution of the company’s strategic initiatives. A.M. Best will monitor the company’s restoration of historical profitability levels.
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