AM Best Affirms Credit Ratings of Atradius Seguros de Crédito, S.A.
July 18 2024 - 12:38PM
Business Wire
AM Best has affirmed the Financial Strength Rating of A
(Excellent), the Long-Term Issuer Credit Rating of “a+” (Excellent)
and the Mexico National Scale Rating of “aaa.MX” (Exceptional) of
Atradius Seguros de Crédito, S.A. (Atradius Mexico) (Mexico City,
Mexico). The outlook of these Credit Ratings (ratings) is
stable.
The ratings reflect Atradius Mexico’s balance sheet strength,
which AM Best assesses as very strong, as well as its strong
operating performance, favorable business profile and appropriate
enterprise risk management (ERM).
The ratings also reflect Atradius Mexico’s strategic importance
to the overall Atradius group, given its leading position within
Mexico’s credit insurance segment, its importance as a gateway to
Latin America’s insurance markets, good financial flexibility
derived from its strong capitalization, supportive reinsurance
provided by the group and its seasoned management team. These
positive rating factors are offset partially by the intrinsic
volatility in the credit insurance market.
Atradius Mexico benefits from its integration within the
Atradius group, which allows it to leverage operations on the same
practices and procedures, reinsurance, draft facilities, and
underwriting selection. In addition, its ERM practices show a high
level of integration to its immediate parent, Atradius N.V.
Atradius Mexico offers credit insurance in its domestic market
and was ranked as Mexico’s largest credit insurer in 2023, holding
39% of the market share.
Atradius Mexico’s operating performance remained strong in 2023
due to its sound underwriting and expense control practices to face
challenging market conditions, which are reflected in a return on
equity of 7.7%. AM Best expects Atradius Mexico’s profitability to
continue and rely on its solid operating practices, as well as its
consistent financial product.
AM Best considers Atradius Mexico’s risk-adjusted capitalization
to be at the strongest level, as measured by Best’s Capital
Adequacy Ratio (BCAR). The company maintains significant financial
flexibility as its investment portfolio is concentrated in
short-term fixed-income instruments, with a portion destined to
match currencies in U.S. dollar. The Atradius group further
demonstrates its support to Atradius Mexico through a reinsurance
program placed with Atradius Crédito y Caución, S.A. de Seguros y
Reaseguros (a group entity merged with Atradius Reinsurance
Designated Activity Company, its previous reinsurer).
If there are positive rating actions taken on the main operating
subsidiaries of Atradius N.V., as a result of a change in the key
rating fundamentals of Atradius N.V.’s parent company, Grupo
Catalana Occidente S.A., Atradius Mexico’s ratings likely would
move in tandem. Likewise, if there are negative rating actions
taken on the Atradius group, because of a sustained decline in
operating performance or a sustained and material deterioration in
Atradius N.V.’s consolidated risk-adjusted capitalization, Atradius
Mexico’s ratings would mirror those same rating actions.
A change in AM Best’s perception regarding the actual or
perceived level of strategic importance of Atradius Mexico to the
Atradius group of companies also could impact the company’s
ratings.
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 use of Best’s Credit Ratings, Best’s
Performance Assessments, Best’s Preliminary Credit Assessments and
AM Best press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Juan Pablo Castro Associate Financial Analyst
+52 55 1102 2720, ext. 133 juanpablo.castro@ambest.com
Elí Sánchez Director, Analytics +52 55 1102 2720,
ext. 122 eli.sanchez@ambest.com Christopher Sharkey
Associate Director, Public Relations +1 908 882 2310
christopher.sharkey@ambest.com Al Slavin Senior Public
Relations Specialist +1 908 882 2318
al.slavin@ambest.com