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A.M. Best Affirms Credit Ratings of General de Seguros S.A.B.
[October 05, 2017]

A.M. Best Affirms Credit Ratings of General de Seguros S.A.B.


A.M. Best has affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "bbb+" of General de Seguros, S.A.B. (Genseg) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Genseg's strong risk-based capitalization and profitable operation. Historically, Genseg has been able to increase capital and achieve favorable results given its sound but volatile underwriting results, consistent inflow of investment income and experienced management team. Moreover, the company's financial strength is enhanced by its solid reinsurance program.

Partially offsetting these positive rating factors is the volatility in Genseg's results, initially arising from its exposure to catastrophe risks within its agricultural line of business and the strong competitive landscape on its main business lines.

Genseg initiated operations in Mexico City in 1970. The company mainly underwrites motor, agriculture and life insurance. The company ranks as Mexico's 23rd largest insurer with a market share of 0.79% in 2016. Genseg operates through a network of independent agents, brokers and commercial offices throughout Mexico.

Genseg's capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), is strong and supportive of the ratings. The company consistently has increased capital and surplus at a compound annual growth rate of 4.1% over the past five years. The company's capitalization is further supported by its reinsurance program with highly rated entities. The company's strong capitalization and liquidity have provided Genseg with flexibility in order to cover deviations in claims or volatile securities market conditions without having to realize losses in its investment portfolio. In 2016, Genseg's profitability continued to depend on investment income.

Volatility in Genseg's past results was derived from its exposure to catastrophes risks that affected its agricultural line of business. The company has mitigated this over time through adjusting its reinsurance structure as reflected by improved underwriting metrics characterized by premiums sufficiency in this line in 2016. However, even though motor insurance performance improved, it continues to be driven by losses from Genseg's trucking book of business. Aside from the positive effects, such as reserve releases derived from the implementation of Solvency II-type regulation, the company has improved its underwriting practices and positively impacted its operating performance as reflected by combined ratios close to 100% at year-end 2016. A.M. Best expects Genseg to sustain this trend through year-end 2017, despite challenges arising from a very competitive and maturing market.

Factors that may trigger positive rating actions include stable profitability metrics performing in line with higher rated peers and good short-term performance in its motor business. The company's current ratings could come under pressure should soft market conditions continue and a lack of underwriting discipline generates results and overall profitability that fall short of expectations or if capitalization is no longer supportive of the current ratings.

The methodology used in determinig 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.

Key insurance criteria reports utilized:

  • A.M. Best's Ratings On a National Scale (Version Sept. 5, 2014)
  • Analyzing Insurance Holding Company Liquidity (Version March 25, 2013)
  • Catastrophe Analysis in A.M. Best Ratings (Version Nov. 3, 2011)
  • Evaluating Country Risk (Version May 2, 2012)
  • Insurance Holding Company and Debt Ratings (Version May 6, 2014)
  • Rating Members of Insurance Groups (Version Dec. 15, 2014)
  • Risk Management and the Rating Process for Insurance Companies (Version April 2, 2013)
  • Understanding Universal BCAR (Version May 1, 2017)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Understanding Best's Credit Ratings.


  • Previous Rating Date: November 30, 2016
  • Date of Financial Data Used: June 30, 2017

This press release relates to rating(s) that have been published on A.M. Best's website. For additional 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 A.M. Best's Recent Rating Activity web page.

A.M. Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. A.M. Best does not audit the company's financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, A.M. Best cannot attest as to the accuracy of the information provided.

A.M. Best's credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best's credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best's rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct. For information on the proper media use of Best's Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.


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