A.M. Best Affirms Ratings of Atradius, Seguros de Crédito, S.A.

MEXICO CITY--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating (FSR) of A (Excellent), the issuer credit rating (ICR) of “a” and the Mexico National Scale Rating of “aaa.MX” of Atradius, Seguros de Crédito, S.A. (Atradius) (Mexico City, Mexico). The outlook for all ratings is stable.

The ratings reflect Atradius’ strategic importance to the overall Atradius group, given its leading position within the credit insurance segment in Mexico, its importance as a gateway to the Latin American market, good financial flexibility derived from its strong capitalization, supportive reinsurance provided by the group and its seasoned management team. These positive factors are partially offset by volatility in the company’s net income due to the intrinsic volatility in the credit insurance market.

The company benefits from its integration within the Atradius group, which allows it to leverage operations on the same practices and procedures, reinsurance, draft facilities and underwriting selection. In addition, its enterprise risk management (ERM) practice shows a high level of integration with its parent company, Atradius N.V.

Atradius offers credit insurance in the Mexican market, and is ranked as the largest credit insurer in the country, as of June 2015. The three largest participants in this line of business hold 92% of the market share. Atradius is the oldest credit insurer in Mexico.

The financial performance of Atradius compares favorably with that of the credit insurance industry in Mexico, and it has posted better-than-average loss ratios due to its underwriting and collection practices. In 2014, Atradius increased its gross written premium by 23.8%, at the same time that it improved its profitability, reaching a return on premium of 23.0%. A.M. Best expects the company to sustain this performance due to its strong underwriting and expense control practices.

Atradius’ capitalization is very strong, according to Best’s Capital Adequacy Ratio, and as a result, the company maintains significant financial flexibility. Furthermore, A.M. Best expects the company to sustain its capitalization level. Atradius’ reinsurance program is completely placed with Atradius Reinsurance Limited, which currently holds an FSR of A (Excellent) and an ICR of “a”, further demonstrating the support received by the group.

If there are positive rating actions on the main operating subsidiaries of Atradius N.V., the ratings of Atradius would likely move in tandem. Likewise, if there are negative rating actions on the Atradius group, the ratings of Atradius would likely mirror those same actions. Additionally, if A.M. Best’s view of the subsidiary’s strategic importance to the group deteriorates, the ratings also likely will be negatively affected.

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 Ratings On a National Scale
• Catastrophe Analysis in A.M. Best Ratings
• Evaluating Country Risk
• Rating Members of Insurance Groups
• Risk Management and the Rating Process for Insurance Companies
• Understanding Universal BCAR

Click here for a general description of the policies and procedures used to determine credit ratings. Also in accordance with Mexican regulations, the following is a link to required disclosures – A.M. Best America Latina Supplementary Disclosure.

• Previous Rating Date: Dec. 19, 2014.
• Date of Financial Data Used: June 30, 2015.

This press release relates to rating(s) that have been published on A.M. Best's website. For additional 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best’s credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct.

A.M. Best - Europe Rating Services Limited (AMBERS), a subsidiary of A.M. Best Company, is an External Credit Assessment Institution (ECAI) in the European Union (EU). Therefore, credit ratings issued by AMBERS may be used for regulatory purposes in the EU as per Directive 2006/48/EC.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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A.M. Best Company

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Financial Analyst

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Alfonso Novelo, +(52) 55-1102-2720, ext. 107

Director, Analytics

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Source: A.M. Best Company