Best Affirms Mexico’s Seguros Inbursa ‘A’ Ratings

February 15, 2012

A.M. Best Co. has affirmed the financial strength rating of ‘A ‘(Excellent) and issuer credit rating of “a” of Mexico’s Seguros Inbursa, S.A. Grupo Financiero Inbursa, both with stable outlooks

Best said the ratings reflect Seguros Inbursa’s “solid risk-adjusted capitalization, overall historical profitability and diversified business profile. The ratings also reflect the company’s affiliation with Grupo Financiero Inbursa S.A.B. de C.V., one of the largest financial groups in Mexico.”

Seguros Inbursa writes both life and non-life business and remains one of the larger and more profitable domestic insurance companies operating in Mexico. Best noted that the “company’s focus on expense management, along with consistent levels of investment income, has historically resulted in favorable overall earnings. This has enabled Seguros Inbursa to continue to enhance its risk-adjusted capitalization. In addition, Seguros Inbursa continues to benefit from synergies and significant operating efficiencies as a result of its access to Grupo Financiero Inbursa’s vast financial and system networks.”

As partial offsetting factors Best cited “Seguros Inbursa’s continuing underwriting losses in key business segments and its reliance on investment income for its overall earnings. In addition, the Mexican insurance market remains very competitive, and Seguros Inbursa will be challenged to maintain profitability and market share.

“While Seguros Inbursa is well positioned at its current rating level, factors that may lead to rating enhancement include sustained improvement in the company’s underwriting performance and an upgrade in Mexico’s country risk tier rating.

“Factors that may lead to negative rating actions include weaker than expected operating performance, a sustained decline in underwriting profitability, significant deterioration in risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio and a downgrade in Mexico’s country risk tier rating.

Source: A.M. Best

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