AM Best Upgrades Financial Strength Rating and Issuer Credit Rating of Virginia Surety Seguros de México, S.A. de C.V.

AM Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a” (Excellent) from “a-” (Excellent) of Virginia Surety Seguros de México, S.A. de C.V. (VSSM). The outlook of these Credit Ratings (ratings) has been revised to stable from positive. AM Best also has affirmed the Mexico National Scale Rating (NSR) of “aaa.MX” (Exceptional) of VSSM. The outlook of the NSR is stable.

The ratings reflect VSSM’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The upgrading of the company’s FSR and Long-Term ICR reflect the reinforcement of its balance sheet strength through the sustained strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), underpinned by consistent profitable results. The ratings of VSSM also factor in its recent affiliation and strategic importance to Assurant, Inc., the ultimate parent.

VSSM is a subsidiary of Virginia Surety Company, Inc., a general underwriting entity part of The Warranty Group, Inc. (TWG). In 2017, TWG completed a merger agreement with Assurant, Inc., with the purpose of combining insurance operations in various jurisdictions, including the operation in Mexico. VSSM started operations in Mexico in January 2017, focused on the auto insurance line of business and other property/casualty business lines. VSSM also underwrites specialty products, offering coverage in cases of theft or accidental damage for consumer technology products, such as cellphones, photographic and sound equipment and home appliances. VSSM places its coverage products through its network of manufacturers, distributors and retailers.

VSSM operates under the same management as Assurant Daños México, S.A. and Assurant Vida México, S.A., subsidiaries of Assurant, Inc. These companies operate separately, but do not compete against each other. Moreover, VSSM takes advantage of the operational synergies derived from being part of the Assurant group.

Negative rating actions could take place if substantial deterioration in VSSM’s operating performance or aggressive growth in its premiums leads to a drop in risk-adjusted capitalization to levels no longer supportive of its current ratings.

Negative rating actions could also take place if AM Best considers that parental support of VSSM or the strategic importance to its group deteriorates.

While positive rating actions are unlikely, factors that could lead to them for VSSM include favorable results in operating performance.

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.

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