A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Mapfre Tepeyac S.A. (Mapfre) (Mexico). The rating outlook is stable.
The rating reflects Mapfre’s excellent capitalization, favorable
operating trends and strong market presence. Additionally, the rating
recognizes the company’s relationship with its parent, Mapfre America S.A., and the backing Mapfre receives as a strategic member of the Mapfre Group, the leading insurer in Spain. To better identify its association with Mapfre America, Mapfre has recently changed its name from Seguros Tepeyac to Mapfre Tepeyac. Operating results remain strong especially in its core auto business, which are backed by disciplined underwriting standards that enabled Mapfre to achieve above average returns.
Offsetting these positive factors is the instability of the local
Mexican market as there are still concerns of a downturn in current
economic indicators. Volatility in the investment market and low investment yields will challenge Mapfre’s ability to further improve its operating performance.
Furthermore, the Mexican market has turned highly competitive
with the increased presence of foreign insurers, offering new challenges for Mapfre to sustain and increase its market share.
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