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A.M. Best Assigns Credit Ratings to MAPFRE MÉXICO, S.A.
[November 10, 2017]

A.M. Best Assigns Credit Ratings to MAPFRE MÉXICO, S.A.


A.M. Best has assigned a Financial Strength Rating of A (Excellent), a Long-Term Issuer Credit Rating of "a" and a Mexico National Scale Rating of "aaa.MX" to MAPFRE MÉXICO, S.A. (MM) (Mexico City, Mexico). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings of MM recognize its affiliation with its immediate parent, MAPFRE INTERNACIONAL, S.A., as well as the synergies and operating efficiencies derived from being a group member of MAPFRE S.A., the leading insurer in Spain.

MM's ratings reflect its solid risk-adjusted capitalization, its competitive position in Mexico's insurance industry and adequate enterprise risk management (ERM) practices. Offsetting these positive rating factors is the deterioration in MM's operating performance in 2016, stemming from its previous strategy to expand its market share.

MM operates as a composite insurer of life and non-life business and ranks among Mexico's five-largest insurers based on written premiums.

MM's written premiums diminished in 2016, given the large increase in the previous year from underwriting of the biannual property-liabilities policy of Petróleos Mexicanos (PEMEX), a state-owned oil and gas company. As of year-end 2016, MAPFRE Tepeyac, S.A. (MM's former name) generated net income despite deterioration in its operating performance, mainly driven by the release of catastrophe and technical reserves derived from the adoption of Solvency II-type standards in Mexico and good financial products. Efforts made by the company to improve its loss and administrative expense ratios did not materialize favorably in 2016; however, as of September 2017, the company has improved its operating performance. The company in 2017 renewed the PEMEX policy for USD 546.3 million.

The company's risk-adjusted capitalization is supportive of the current ratings. In 2016, net required capital decreased in a steeper manner than policyholders' surplus. This was the result of diminished asset base caused by the implementation of market valuation of investments and capital benefiting from the positive net income without dividend payments. In the medium term, A.M. Best expects changes in underwriting strategy to be reflected in better net results and therefore in a more robust capital base that could give way to a stronger risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR).

ERM practices are well-established and implemented throughout the company and closely follow those set by MAPFRE S.A. This integration has benefited the company's implementation of Mexico's new Solvency II-type regulations.

Positive rating actions on its ultimate parent, MAPFRE S.A., also could result in positive rating actions on MM. Factors that may lead to negative rating actions include significant and sustained deterioration of its underwriting quality in subsequent years, which could significantly weaken its capitalization. In addition, negative rating actions for its ultimate parent would result in a downward movement of MM's ratings.

The methodology used in determining hese 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:

  • Evaluating Country Risk (Version Oct. 13, 2017)
  • Understanding Universal BCAR (Version Oct. 13, 2017)
  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)
  • A.M. Best Ratings on National Scale (Version Oct. 13, 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: Sept. 21, 2017 (Ratings affirmed, then withdrawn)
  • Date of Financial Data Used: Sept. 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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