AM Best withdraws credit rating of AVLA Seguros, SA de CV

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MEXICO CITY–(BUSINESS WIRE)–optimal has changed the outlook from stable to negative and affirmed the Financial Strength Rating (FSR) of B+ (Good), the Long-Term Issuer Credit Rating (ICR) of “bbb-” (Good), and the National Scale Rating (NSR) of Mexico of “aa-.MX” (Superior) from AVLA Seguros, SA de CV (AVLA) (Mexico). At the same time, AM Best has withdrawn the ratings in response to the company’s request to no longer continue the AM Best interactive rating process.

This final rating update was completed after the company requested not to continue with the rating process.

AVLA’s ratings reflect its balance sheet strength (assessed as strong by AM Best), good operating performance, limited business profile and adequate overall risk management.

AVLA is part of AVLA Bermuda Holding Corp Ltd. (AVLA Bermuda), a financial holding company with insurance operations in Chile, Peru and Brazil. As of December 2023, AVLA Bermuda had net assets of USD 93.9 million and premiums of USD 129 million. AVLA México is considered a newly created company and has been operating since October 2021 under a “Credit and Surety Insurance” license, which allows it to issue three types of insurance: credit, guarantee and surety bonds. The company’s target markets are those where the group has regional experience in credit insurance and surety bonds. However, AVLA’s business profile is considered limited, given the high level of competition in the sector and the significant differences in market dynamics compared to other regions where the group operates.

Balance sheet strength is considered strong. The company deployed capital prudently in its first year of operations, but the ramp-up in 2023 puts pressure on Best’s capital adequacy ratio (BCAR), which could affect the assessment of balance sheet strength if not supported by capital increases.

The company’s operating performance is considered neutral and in line with its positioning as a newly established company. AVLA has achieved its goals in its first few years and expects to have a subscription experience consistent with the market. AVLA’s comprehensive risk management is considered appropriate for the company’s risk appetite and has strong support from the parent company’s management area.

The negative rating outlook reflects AM Best’s concerns about risk-adjusted capital if the company continues to grow without capital investment. However, the group has demonstrated a policy of continuing to deploy capital to support growth in its participating regions.

This press release refers to the ratings published on the AM Best website. For all other rating information relating to the relevant release and dissemination, including details of the office responsible for issuing each individual rating mentioned in this press release, please consult the website: Press release Author: AM Best. For more information on the use and limitations of credit rating opinions, see Best Credit Score Guide. for For more information on the proper use of Best Credit Ratings, Best Performance Assessments, Best Initial Credit Assessments and AM Best news releases, visit Guidelines for the appropriate use of best ratings and reviews.

AM Best is a global credit rating agency, news and data provider specializing in the insurance industry. Headquartered in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, www.ambest.com.

Contact information

Eli Sanchez
Director of Analytics
+52 55 9085 7503
(email protected)

Alfonso Novello
Director of Advanced Analytics
+52 55 9085 7501
(email protected)

Christopher Sharkey
Deputy Director of Public Relations
+1 908 882 2310
(email protected)

Al Slavin
Senior Public Relations Strategist
+1 908 882 2318
(email protected)

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