AM Best Revises Outlooks to Positive for HDI Global Seguros, S.A.
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
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
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-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 toward HDI-GS’ obligations. Support from the group in the past has come through capital injections, with the most-recent one in 2015, aimed to support growth and maintain adequate reserves and capital sufficiency.
Reinsurance commissions continue to impact acquisition costs positively, given that HDI-GS’ extensive reinsurance program is placed with its affiliate,
If there are positive rating actions on the main operating subsidiaries of HDI-Talanx group following demonstrated resilience of the balance sheet due to the group’s prudent risk culture, underpinned by strong and stable operating performance across business segments, HDI-GS’ ratings would move in tandem. Likewise, if there are negative rating actions on HDI V.a.G., as a result of operating performance deteriorating below the level required for the strong assessment, due to factors such as unexpectedly high losses or marked deterioration in underwriting risk controls, resulting in a sustained decline in technical results, the ratings of the
This press release relates to Credit Ratings that have been published on AM Best’s website. For all 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Source: AM Best
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