AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of XL Seguros México, S.A. de C.V.
MEXICO CITY–(BUSINESS WIRE)–AM Best has maintained the under review with negative implications status and affirmed the Financial Strength Rating of B++ (Good), the Long-Term Issuer Credit Rating of “bbb+”, and the Mexico National Scale Rating of “aa+.MX” of XL Seguros México, S.A. de C.V. (XLSM) (Mexico). AM Best placed these Credit Ratings (ratings) under review with negative implications on Sept. 11, 2020, following the announcement that the legal authorization to transfer XLSM’s portfolio to AXA Seguros, S.A. de C.V. (AXA Seguros) had been requested.
Prior to these rating actions, XLSM was a member of XL Bermuda Ltd (XL) and deemed by AM Best to be a strategically important subsidiary. On Aug. 26, 2020, XLSM announced that it has initiated the authorization procedure with Mexico authorities for a portfolio transfer between XLSM and AXA Seguros. Due to this event, AM Best no longer considers XLSM as strategically important and has removed its group status.
XLSM’s balance sheet strength level of very strong is the result of the company’s risk-adjusted capitalization achieved through the reinvestment of earnings, along with its extensive reinsurance program placed within the XL Group. XLSM has remained profitable despite volatility in its premium growth, given the competitive nature of the property/casualty segment, and continues to be supported by reinsurance commissions for its ceding profile. XLSM’s business profile is limited due to the underwriting capabilities that will remain once the portfolio transfer is complete.
The portfolio transfer is still subject to definitive approval by Mexico authorities. The ratings will remain under review with negative implications until AM Best can fully assess the financial position of XLSM after the completion of the transaction.
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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.
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