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 MAPFRE Fianzas, S.A. (MF) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

MF is a member of MAPFRE S.A., which on a consolidated basis has a balance sheet strength that AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

MF’s ratings reflect its strategic importance to and 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 MF’s role as a complementary business line of MAPFRE México, S.A. (MM), as well as MF’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) on a consolidated basis, its consistent profitability at year-end 2023 and solid reinsurance program. Partially offsetting these positive rating factors are the company’s low participation within Mexico’s surety market and limited growth potential in the country’s slowing economic environment. 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 complementing the services provided by MAPFRE S.A. The company holds a small market share within Mexico’s surety industry, based on gross premium written, with its portfolio composed mainly of administrative, judicial, and credit and fidelity businesses. MF’s corporate practices are in line with MM and MAPFRE S.A.

MF’s risk-adjusted capitalization remains underpinned by its profit retention and consistent operating performance in 2023. In 2023, MF continued to limit its exposure to business risk derived from contingent claims. This exposure could lead to unexpected impacts on profitability and deterioration of its capital base. Such scenarios have been incorporated into the rating analysis and present a key point for AM Best to consistently review. The company’s relatively low premium volume makes it vulnerable to adverse market conditions and claims deviations, which limits AM Best’s view of the ratings. However, MF’s appropriate reinsurance program, provided by its affiliates, MAPFRE RE, Compañía de Reaseguros, S.A. and Solunion Seguros Compañia Internacional de Seguros y Reaseguros S.A., partially offsets AM Best’s view.

In 2023, MF top line marginally contracted, however; MF maintained profitability partially driven by intercompany adjustments to administrative costs, consistent investment income, and well-contained claims and acquisition expenses.

If there are negative rating actions taken on the MAPFRE group, as a result of a sustained decline in operating performance, AM Best´s expectation for the strong assessment level or a sustained deterioration in MAPFRE S.A.’s consolidated risk-adjusted capitalization, MF’s ratings would mirror those same actions.

A change in AM Best’s perception regarding the actual or perceived level of MF’s strategic importance to the MAPFRE group 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.

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