AM Best has upgraded the Financial Strength Rating to B+ (Good) from B (Fair), the Long-Term Issuer Credit Rating to “bbb-” (Good) from “bb” (Fair) and the Mexico National Scale Rating (NSR) to “aa-.MX” (Superior) from “a.MX” (Excellent) of Armour Secure Insurance S.A. de C.V. (Armour) (Mexico). The outlook of these Credit Rating (ratings) has been revised to stable from positive.

The ratings reflect Armour’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and marginal enterprise risk management (ERM).

The rating upgrades reflect the stabilization in structure and capital management that followed the corrective actions taken on financial leverage at the holding company level, which was derived from changes in the organizational structure of the group.

The stable outlooks reflect Armour’s capability to maintain its balance sheet strength through profitable results.

The strong balance sheet assessment reflects Armour’s capital base, consistently strengthened through the reinvestment of earnings. Armour has been able to sustain a profitable domestic operation through its underwriting results, consistently reporting premium sufficiency that has benefited from efficiencies in management expenses in the last few years. Armour’s investment income is susceptible to foreign exchange volatility given its long position in U.S. dollars; however, technical results are sufficient to sustain profitability, offsetting any exchange losses.

Armour is the leader in Mexico’s title insurance market, holding over 70% of market share as of December 2023, with only one competitor. The company’s business profile is limited due to its concentration in a niche market.

AM Best’s view of the company’s ERM is marginal due to concerns regarding governance and availability of information at its holding company, Trebuchet Group Holdings Limited.

Negative rating actions could take place if the company’s risk-adjusted capitalization weakens due to significant cash withdrawals or excessive premium growth, or if operating performance deteriorates to a point no longer supportive of its current assessment. Positive rating actions could occur if, in AM Best’s view, Armour and its holding company keep improving communication, demonstrating transparency and efficiency in information and processes.

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 Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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