AM Best Upgrades Issuer Credit Rating of MAPFRE Fianzas, S.A.

AM Best has upgraded the Long-Term Issuer Credit Rating to a+ from a and affirmed the Financial Strength Rating of A (Excellent) and the Mexico National Scale Rating of aaa.MX to MAPFRE Fianzas, S.A. (MF) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect MFs balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The Long-Term ICR upgrade reflects MFs strategic importance to, and strategic alignment with, 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. The ratings also reflect MFs role as a complementary business line of MAPFRE M‰XICO S.A. (MM), as well as MFs good risk-adjusted capitalization, adequate profitability as of December 2017 and solid reinsurance program. Partially offsetting these positive rating factors are the companys exposure to contingent claims and low participation within the surety market. While MF is a legal subsidiary of MM, its strategy and operations are directed as a boutique business line focused on maintaining market presence and complimenting the services provided by its immediate parent. The company is the 15th largest surety writer in Mexico, based on gross premium written, with its portfolio composed of 86.8% administrative, 10.7% judicial, 1.7% credit and 0.8% fidelity. MFs corporate practices are in line with MM and MAPFRE S.A.

MFs risk-adjusted capitalization remained strong in 2017 due to its profit retention and good operating performance during the year. MF also diminished its exposure to business risk derived from contingent claims to 5% of its reported surplus, compared with 15.9% in 2016. This exposure could lead to unexpected impacts on profitability and deterioration of its capital base. Such scenarios have been incorporated into the ratings and present a key point for AM Best to review in coming years. The companys relatively low premium volume makes it vulnerable to adverse market conditions and claims deviations, which limits AM Bests view of the ratings. However, MFs appropriate reinsurance program, provided by its affiliate, MAPFRE RE, Compa±­a de Reaseguros, S.A., partially offsets AM Bests view.


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In 2017, MF saw a considerably greater contraction of business than that of the industry composite, by 11.7% year over year compared with the composites 1%. MF maintained a similar bottom-line result to that of the previous year due to lower administrative costs and better investment income.

Positive rating actions on its ultimate parent, MAPFRE S.A., could result in further positive rating actions for MF. Negative rating actions could occur if MFs profitability is affected by material contingent claims or a higher cost structure that erodes its level of risk-adjusted capitalization to a level that no longer supports the current ratings. In addition, negative rating actions on its ultimate parent could result in a downward movement of MFs ratings.

This press release relates to Credit Ratings that have been published on AM Bests 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 Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit for more information.

Copyright 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Elí Sánchez
Senior Financial Analyst
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