OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Besthas upgraded the financial strength rating to B (Fair)
from B- (Fair) and issuer credit rating to “bb” from “bb-” of QuÁlitas
CompaÑia de Seguros S.A.B. de C.V.(Qualitas) (Mexico). The outlook
for both ratings is stable.
The rating upgrades reflect Qualitas’ leading market position in the
increasingly competitive Mexican automobile insurance segment, its
formidable distribution network and solid overall profitability in
recent years. Qualitas operates through a network of local agents,
financial institutions and service offices and has established a
formidable distribution capability throughout Mexico. This has enabled
the company to maintain its leading market position in the Mexican
automobile insurance segment in extremely challenging economic and
market conditions. Qualitas reported favorable underwriting net income
in 2012, reflecting its highest historical operating performance.
Offsetting rating factors include Qualitas’ consistently elevated
underwriting leverage and trend of underwriting losses. Historically,
the company has operated with underwriting leverage considered higher
than expected for an automobile insurance provider. Additionally,
Qualitas maintains combined ratios just above breakeven due to its high
level of loss and loss adjustment expenses recorded each year.
Key rating drivers that could lead to positive rating actions for
Qualitas include continued favorable trends in revenues and earnings,
capital growth and improvement in the underwriting leverage. Key factors
that could lead to negative rating actions include unfavorable operating
performance or weakened risk-adjusted capital.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc.ALL RIGHTS
Marien Villegas, 908-439-2200, ext. 5222
Chirico, CPA, 908-439-2200, ext. 5087
Assistant Vice President
Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public
Source: A.M. Best Company, Inc.