AM Best Affirms Credit Ratings of Grupo Mexicano de Seguros, S.A. de C.V.

AM Best has 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 Grupo Mexicano de Seguros, S.A. de C.V. (GMX) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) remains stable.

These ratings reflect GMXs 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 ratings also reflect GMXs improved underwriting practices, a reinsurance program placed with counterparties that have strong levels of security and GMXs well-planned business strategy. In addition, these ratings also consider GMXs affiliation with its immediate parent, GMS Valore, S.A. de C.V. (formerly Grupo Maxasem), which provides GMX with synergies and operating efficiencies as a member of this group. Offsetting these positive rating factors is the strong competitive environment GMX experiences in its main business lines, which could pressure future underwriting performance.

The company initiated operations in Mexico City in 1998. GMX underwrites property/casualty insurance and ranked ninth in this segment, with 3.9% market share as of September 2019, based on direct premiums written. The companys main business line is personal liability, and it operates mainly through a network of independent agents and promoters, as well as online sales.

GMXs overall underwriting results have improved significantly from prior years, as its combined ratio has remained below the 100% threshold since 2015. During 2018, the company improved its underwriting results and increased retention, and when coupled with lower claims and stable management expenses, enhanced overall profitability. As of September 2019, the company maintained adequate underwriting performance and investment yields, and recorded positive bottom-line results.

GMXs management team has a solid track record in terms of implementing strategies and taking advantage of opportunities for innovation in Mexicos insurance market given the increased competition.

Factors that may lead to positive rating actions include sustained improvement in the companys underwriting performance and material enhancements in its risk-adjusted capitalization.

Negative rating actions could occur should GMX experience a continued deterioration of underwriting results or a decline in balance sheet strength. A substantial and sustained lack of coverage for regulatory capital requirements also could create negative rating pressure.

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 Guide to 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 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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Inger Rodriguez

Associate Financial Analyst

+52 55 1102 2720 ext. 108

[email protected]

Alfonso Novelo

Senior Director, Analytics

+52 55 1102 2720 ext. 107

[email protected]

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Jim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

[email protected]