AM Best Revises Outlooks to Positive for HDI Global Seguros, S.A.

ENPNewswire-November 15, 2021--AM Best Revises Outlooks to Positive for HDI Global Seguros, S.A

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Release date- 14112021 - AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of 'a+' (Excellent ) of HDI Global Seguros, S.A. (HDI-GS) (Mexico).

Concurrently, AM Best has affirmed the Mexico National Scale Rating of 'aaa.MX' (Exceptional) of HDI-GS. The outlook of this Credit Rating (rating) is stable.

The ratings reflect HDI-GS' balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.

The ratings also reflect HDI-GS' substantial reinsurance support from its group through HDI Global Network AG, which currently has an FSR of A (Excellent) and a Long-Term ICR of 'a+' (Excellent). Additionally, the ratings factor in HDI-GS' integration within its ultimate parent company, HDI Haftpflichtverband der Deutschen Industrie V.a.G. (HDI V.a.G.), in terms of the business model and consistent financial support.

The revision of HDI-GS' outlooks to positive reflects AM Best's expectation that HDI-V.a.G.'s prudent risk culture and strong and stable operating performance, supported by improved profitability of its primary business segment, will further enhance the resilience of HDI-GS' balance sheet.

HDI-GS is a subsidiary of HDI Global Insurance Company (99.9%) and HDI Global Network AG (0.1%), which are both subsidiaries of HDI V.a.G. HDI-GS' business portfolio is composed of fire, liability, marine and engineering risks. HDI-GS' business model utilizes a very low premium retention level, standing at 0.11% at year-end 2020, which is supported completely by an automatic facultative reinsurance agreement provided by its affiliate and minority shareholder, HDI Global Network AG.

HDI-GS' risk-adjusted capitalization stands at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR), with growth in capital and surplus during the past five years, mainly driven by consistent positive bottom-line results. Given the company's ceding profile, credit risk continues to be the main driver for required capital; however, AM Best does not view this as a major concern given the counterparty's excellent level of security and the binding characteristics of the contract...

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