MEXICO CITY, April 12, 2024—(BUSINESS WIRE)–AM Best raised the Financial Strength Rating to B+ (Good) from B (Satisfactory), the Long-Term Issuer Credit Rating to “bbb-” (Good) from “bb” (Satisfactory) and Mexico’s National Scale Rating (NSR) to ” aa- .MX” (Superior) from “a.MX” (Excellent) of Armor Secure Insurance SA de CV (Armour) (Mexico). The outlook for these credit ratings (ratings) has been revised from positive to stable.
The ratings reflect Armour’s strong balance sheet, which AM Best rates as strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management (ERM).
The upgrade reflects the stabilization of the capital structure and management, which followed the corrective actions taken on the financial leverage at the holding company level, which resulted from the changes in the organizational structure of the group.
The stable outlook reflects Armour’s ability to maintain its balance sheet strength through profitable results.
The strong balance sheet valuation reflects Armour’s capital base, consistently strengthened by reinvesting earnings. Armor has been able to maintain a profitable internal operation through its underwriting results, consistently reporting sufficient premium that has benefited from management cost efficiencies over the past several years. Armour’s investment income is susceptible to foreign currency volatility given its long position in US dollars; however, technical results are sufficient to maintain profitability, offsetting any exchange losses.
Armor is the leader in the Mexican property insurance market, holding over 70% market share as of December 2023, with only one competitor. The company’s business profile is limited due to its concentration in a niche market.
AM Best’s view of the company’s ERM is marginal due to concerns about the governance and availability of information at the holding company, Trebuchet Group Holdings Limited.
Negative rating actions could occur if the company’s risk-adjusted capitalization weakens due to significant cash withdrawals or excessive premium growth, or if operating results deteriorate to a point that no longer supports the current rating. Positive rating actions could occur if, according to AM Best, Armor and its holding company continue to improve communication, demonstrating transparency and efficiency in information and processes.
This press release refers to the credit ratings that are published on the AM Best website. For all rating information relating to the release and relevant disclosures, including details of the agency responsible for issuing each of the individual ratings set out in this release, please see AM Best’s Recent assessment activity Web page. For additional information on the use and limitations of credit score opinions, please see Guide to Best Credit Ratings. For information on the proper use of Best’s credit ratings, Best’s performance ratings, Best’s preliminary credit ratings, and AM Best’s press releases, see A guide to the proper use of Best’s ratings and reviews.
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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Contacts
Inger Rodriguez
A financial analyst
+52 55 9085 6353
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Eli Sanchez
Director, Analytics
+52 55 9085 7503
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Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
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Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
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