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TMCNet:  A.M. Best Affirms Credit Ratings of Afianzadora Sofimex, S.A.

[January 11, 2018]

A.M. Best Affirms Credit Ratings of Afianzadora Sofimex, S.A.

A.M. Best has affirmed the Financial Strength Rating of A- (Excellent), the Long-Term Issuer Credit Rating of "a-" and the Mexico National Scale Rating of "aaa.MX" of Afianzadora Sofimex, S.A. (Sofimex) (Mexico City, Mexico). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Sofimex's balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, neutral business profile and adequate enterprise risk management.

The ratings also reflect Sofimex's strong operating performance in terms of profitability and competitiveness within Mexico's surety bond market, as well as very strong risk-adjusted capitalization. These positive rating factors are limited by A.M. Best's view of the highly competitive market in which the company operates.

Sofimex is a Mexico-domiciled surety and bond company that was established in 1940. The company offers surety and fidelity coverages ranging from low limit judicial bonds to high limit contract bonds. As of December 2016, Sofimex's business portfolio was composed of administrative sureties (89.3%), fidelity (3.2%), credit (3.3%) and judicial (4.2%).

Sofimex projects a 9.2% gross written premium growth rate for 2017 while maintaining its recent profitability metrics. A.M. Best believes that, as Mexico's fourth largest surety writer, and with a good distribution network and disciplined underwriting, Sofimex has sufficient resources to maintain a stable stream of net income amid current market conditions.

Sofimex continued to post good loss ratios during 2016 and up to September 2017. Due to changes in its commission system, the company has been able to maintain a combined ratio below 70%. The company recently developed a back-office structure that decreased administrative costs as well. Sofimex's capitalization has remained strong and supportive of its ratings, even when stressed by possible losses from contingent claims. Furthermore, Sofimex has a solid reinsurance program with highly rated reinsurers and long-term business relationships.

Positive rating actions could occur if the company is able to maintain its current level of acquisition costs and improve its level of claims loss payments, increase profitability and, as a consequence, further strengthen its capital base. Negative rating actions could occur if underwriting performance deteriorates or if there is a significant increase in business risk or net premium risk.

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

Key insurance criteria reports utilized:

  • Evaluating Country Risk (Version Oct. 13, 2017)
  • Understanding Universal BCAR (Version Oct. 13, 2017)
  • Rating Surety Companies (Version Oct. 13, 2017)
  • A.M. Best's Ratings On a National Scale (Version Oct. 13, 2017)

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: Dec. 21, 2016 (FSR and Long-Term ICR); Oct. 13, 2017 (NSR)
  • Date of Financial Data Used: Sept. 30, 2017

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 see A.M. Best's Recent Rating Activity web page.

A.M. Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. A.M. Best does not audit the company's financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, A.M. Best cannot attest as to the accuracy of the information provided.

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. For information on the proper media use of Best's Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases.

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

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