GNP Breaking News!
Press Release Source: A.M. Best Co.
Friday February 3, 3:27 pm ET
OLDWICK, N. J.--(BUSINESS WIRE)--Feb. 3, 2006--A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of Grupo Nacional Provincial, S.A. (GNP) (Mexico City, Mexico). The rating outlook is stable.
The rating reflects GNP's solid risk-adjusted capitalization, leading position in the Mexican insurance market, favorable operating results and effective reinsurance program. GNP operates as a composite insurer of life and non-life business in Mexico and is a member of Grupo Bal, one of the largest conglomerates in Mexico.
GNP remains one of the largest insurance companies in Mexico--in terms of gross premiums written--with core lines of business in life, health and auto coverage. GNP's conservative underwriting strategy and prudent expense management have resulted in favorable earnings over the past several years. Investment performance continues to be strong and is managed by conservative asset-liability matching techniques, which minimize mismatch exposure particularly in its life lines of business. In addition, GNP has updated its support and information systems, resulting in significant improvements in operational efficiency, administration expenses and data management capabilities in recent years.
Partially offsetting these factors is the increasingly competitive Mexican insurance market and rising reinsurance costs stemming from the increased frequency of catastrophe events. GNP faces growing competition from both foreign insurers and smaller domestic providers as companies seek to gain market share. Furthermore, GNP is dependent upon reinsurance protection given its exposure to catastrophic events and, as a result, is subject to higher reinsurance costs. These factors will challenge GNP to maintain market share and profitability over the near term.
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