AM Best has revised the under review status to negative from developing and affirmed the Financial Strength Rating of B (Fair), the Long-Term Issuer Credit Rating of “bb” and the Mexico National Scale Rating of “a.MX” of Armour Secure Insurance S.A. de C.V. (Armour) (Mexico).
The under review with negative implications status reflects AM Best’s ongoing review of the financial situation at Armour’s holding company after the cancellation of the acquisition of its operation in Mexico by AXA XL. This transaction was cancelled at the conclusion of the waiting period for regulatory approval on Nov. 25, 2020, as established in the acquisition agreement.
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 strong balance sheet assessment reflects Armour’s capital base, consistently strengthened through the reinvestment of earnings over the years. Armour has been able to sustain a profitable domestic operation through its underwriting results and investment income.
Armour’s business profile is limited due to its concentration in the niche market of title insurance in Mexico, coupled with challenges ahead for the real estate market amid Mexico’s weakened economy.
AM Best’s view of the company’s ERM is marginal due to concern regarding governance and availability of information at its holding company, Trebuchet Group Holdings Limited.
The ratings will remain under review until AM Best can fully assess the financial situation at Armour’s holding company.
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