The ratings reflect El Aguila’s support from its parent company,
El Aguila’s capitalization is strong, with underwriting risk standing as the main component for required capital, according to Best’s Capital Adequacy Ratio (BCAR). Support from El Aguila’s parent company has been reflected in capital injections whenever required to back-up its growth and improve its operations.
The company’s profitability indicators historically have remained below the auto segment’s average, mainly as a result of higher acquisition expenses derived from its focus on developing its direct sales force. On the other hand, this strategy has resulted in higher renewal rates than those registered by its main peers, and has partially mitigated pressure in underwriting derived from the highly competitive environment in the Mexican auto insurance industry. Given its small size, the company shows higher geographic concentration than that of its peers, making it more vulnerable to soft market conditions in its main regional markets within
Positive rating actions could occur if
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.
Key insurance criteria reports utilized:
- A.M. Best’s Ratings On a National Scale (Version
September 05, 2014)
- Analyzing Insurance Holding Company Liquidity (Version
March 25, 2013)
- Catastrophe Analysis in A.M. Best Ratings (Version
Nov. 03, 2011)
- Evaluating Country Risk (Version
May 02, 2012)
Insurance Holding Companyand Debt Ratings (Version May 6, 2014)
- Rating Members of Insurance Groups (Version
Dec. 15, 2014)
- Risk Management and the Rating Process for Insurance Companies (Version
April 2, 2013)
- Understanding Universal BCAR (Version
April 28, 2016)
View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to “Understanding Best’s Credit Ratings.”
- Previous Rating Date:
October 26, 2015
- Date of Financial Data Used:
June 30, 2016
This press release relates to rating(s) that have been published on
While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed.
A.M. Best’s credit ratings are independent and objective opinions, not statements of fact.
Copyright © 2016 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
Associate Financial Analyst
Manager, Public Relations
Director, Public Relations