AM Best Withdraws Credit Ratings of AVLA Seguros, S.A. de C.V.
19 Julio 2024 - 5:57PM
Business Wire
AM Best has revised the outlooks to negative from stable
and affirmed the Financial Strength Rating of B+ (Good), the
Long-Term Issuer Credit Rating of “bbb-” (Good) and the Mexico
National Scale Rating (NSR) of “aa-.MX” (Superior) of AVLA Seguros,
S.A. de C.V. (AVLA) (Mexico). Concurrently, AM Best has withdrawn
these Credit Ratings (ratings) as the company has requested to no
longer participate in AM Best’s interactive rating process.
This final rating update was completed after the company
requested to no longer participate in the rating process.
The ratings reflect AVLA’s balance sheet strength, which AM Best
assesses as strong, as well as its adequate operating performance,
limited business profile and appropriate enterprise risk management
(ERM).
AVLA is owned by AVLA Bermuda Holding Corp Ltd. (AVLA Bermuda),
a financial holding company engaged in insurance operations in
Chile, Peru and Brazil. As of December 2023, AVLA Bermuda had
equity of USD 93.9 million and generated premiums of USD 129
million. AVLA is considered a new company formation as it began
operations in October 2021 under a license of “Seguros de Crédito y
Caución” (Credit and Surety), and can issue three types of
coverages: credit, surety and bonding. The company will target
those segments in which the group has regional expertise in surety
and credit insurance. Nevertheless, AVLA’s business profile is
considered limited, given the high degree of competition in the
segment and the notable differences in market dynamics compared
with the other regions where the group operates.
AVLA’S balance sheet strength is assessed at the strong level.
The company has deployed its capital cautiously during the first
year of operation; however, growth in 2023 has placed pressure on
company’s Best’s Capital Adequacy Ratio (BCAR), which could further
affect its balance sheet strength assessment, if not supported by
capital growth.
The company’s operating performance is considered neutral and in
line with its position as a recently formed company. AVLA has met
its goals during its initial years and targets underwriting
experience that aligns with market performance. AVLA’s ERM
assessment is considered appropriate for the company’s risk
appetite and strongly supported by the holding company’s back
office.
The negative outlooks reflect AM Best’s concerns on
risk-adjusted capitalization if the company continues to grow
without any further capital contributions. Nevertheless, the group
has demonstrated a policy to deploy capital to support the growth
of its operations in the regions it participates.
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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Eli Sanchez Director Analytics +52 55 9085
7503 eli.sanchez@ambest.com Alfonso Novelo Senior
Director, Analytics +52 55 9085 7501
alfonso.novelo@ambest.com Christopher Sharkey Associate
Director, Public Relations +1 908 882 2310
christopher.sharkey@ambest.com Al Slavin Senior Public
Relations Specialist +1 908 882 2318
al.slavin@ambest.com