MEXICO CITY–(BUSINESS WIRE)–#insurance—AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of Compañía de Seguros Generales Everest Mexico, S.A. de C.V. (Everest Mexico) (Mexico City, Mexico). Concurrently, AM Best has affirmed the National Scale Rating (NSR) of “aaa.MX” (Exceptional). The outlook of the NSR is stable.
Everest Mexico is a member of Everest Group, Ltd. (Everest), which on a consolidated basis has a balance sheet strength that AM Best assesses as strongest, as well as adequate operating performance, a very favorable business profile and appropriate enterprise risk management (ERM).
The revised outlooks to negative from stable reflect elevated uncertainty surrounding the group’s business profile and ERM capabilities, in the wake of Everest’s third-quarter reserve charges of $478 million that were related primarily to its retail commercial insurance business. AM Best notes that this represents Everest’s second material reserve charge in the past 12 months, following $1.5 billion of adverse development reported in the fourth quarter of 2024, which also was largely driven by the group’s retail commercial portfolio. Everest concurrently announced the sale of its retail commercial book of business through a renewal rights transaction with American International Group, Inc., as well as the signing of an adverse development cover on this book of business for accident years 2024 and prior.
In AM Best’s view, the addition of an adverse development cover and the sale of the retail commercial insurance business provides more confidence that Everest’s prospective performance will return to historically stronger levels. The negative outlooks, nevertheless, reflect heightened operational risk as the group shifts its strategy to focus exclusively on its reinsurance and global specialty insurance segments, which together comprise more than 80% of the group’s business and have performed very well historically. An emergence of adverse development in Everest’s remaining business lines, or challenges resulting from restructuring the current group to realign with its new focus, could increase negative pressure on the group’s ratings in the near term.
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