The ratings reflect ZAM’s balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.
The ratings also recognize ZAM’s affiliation and strategic importance to Zurich group, its ultimate parent, which provides synergies and operating efficiencies. Offsetting these positive rating factors are the company’s small size within Mexico’s insurance market and the volatility in its operating results.
The stable outlook reflects the strength of the company’s risk-adjusted capitalization, and is supported further by the positive effects of the shift in business strategy.
The company, which was founded in
ZAM’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains at the assessed level of strongest, supported by positive bottom-line results achieved in 2018 and as of
The company’s investment strategy continues to be conservative and in line with local and group guidelines, and provides a steady flow of revenues to back its operating results.
Key rating drivers that could lead to positive rating actions for ZAM include a sustained improvement in underwriting performance as a result of the new business strategy being successfully executed, thereby reducing existing volatility in its bottom-line results and ultimately leading to strengthening of the company’s risk-adjusted capitalization. Key factors that could lead to negative rating actions include a decrease in the strategic importance of the company to Zurich group, which could diminish AM Best’s expectations of parental support toward the
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Source: AM Best