AM Best Affirms Credit Ratings of Seguros Monterrey New York Life, S.A. de C.V.

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MEXICO CITY–( )– AM Best Has affirmed the Financial Strength Rating of A++
(Superior), the Long-Term Issuer Credit Rating (Long-Term ICR) of aa+
And the Mexico National Scale Rating of aaa.MX of Seguros Monterrey
New York Life, S.A. de C.V. (SMNYL) (Mexico City, Mexico). The outlook
Of these Credit Ratings (ratings) remains stable.

The ratings reflect SMNYLs balance sheet strength, which A.M. Best
Categorizes as strongest, as well as its strong operating performance,
Neutral business profile and appropriate enterprise risk management
(ERM).

The rating also reflect SMNYLs strong integration with its parent
Company, New York Life Insurance Company (New York Life) (FSR A++,
Long-Term ICR aaa), strengthened risk-adjusted capitalization, robust
ERM, positive trend in operating performance and highly competitive
Position in Mexicos life insurance segment. Partially offsetting these
Positive rating factors are its challenging expansion strategy within
Mexicos very competitive market and the uncertainty regarding future
Interest rate shifts.

SMNYL is the Mexico subsidiary of New York Life and a product of the
Seguros Monterrey acquisition in 2000. SMNYL, established in Mexico in
1940, mainly underwrites life products through a solid agent network. As
Of September 2018, SMNYL was Mexicos seventh-largest insurer with a
Market share of 5.3%. The companys product portfolio is composed of
Individual life (67%), individual medical expenses (19%), group medical
Expenses (10%) and group life (4%).

SMNYL benefits from its ultimate parents strong brand recognition. In
Addition, its integration within its group is key to the rating level,
As New York Life active supervises SMNYLs strategy and operations,
Further enhancing its corporate governance and product innovation.
Within New York Lifes international structure, the Mexico operation
Stands out as one of the most significant in terms of its good
Profitability and market presence, which makes the subsidiarys
Operation and strategy very likely to be supported by the group if
Required.

During 2017, the company continued to grow above the life segment market
Pace, improving its bottom-line results and posting good underwriting
Metrics in relation to the market and its past performance despite
Large benefits paid to net premiums ratio, only reflecting the good
Previous mortality and morbidity experience of the company. A.M. Best
Expects SMNYL to maintain its good underwriting performance; net income
Is expected to benefit from the volatility in international and domestic
Market while maintaining a prudent investment strategy. Due to the
Companys robust ERM and corporate governance capabilities, A.M. Best
Believes that SMNYL has sufficient technical tools and market expertise
To achieve an adequate balance between growth and profitability.
Addition, the company presents an adequate investment policy that
Support the profitability of its operation.

Risk-adjusted capitalization is categorized as strongest, despite a
Significant dividend payment made in 2018 that did not materially affect
AM Bests view of the companys risk-adjusted capitalization. Looking
Forward, AM Best expects that SMNYLs capital management capabilities
Will benefit base capital through a strong net income and non-material
Dividend payments. Due to the nature of the life business and its
Investment component, SMNYL is susceptible to changes in interest rates,
Which are expected to moderately increase during 2019.
Its investment portfolios are in line with the characteristics of it
Funds and groups guidelines, placing the company in a favorable
Position to budget such increases.

A.M. Best considers SMNYL to be well-positioned at its current rating
Levels. Future positive rating factors that could lead to an improvement
In the Long-Term ICR include success with the companys expansion goals;
Maintenance of its profitability trend; and strengthening of its capital
Base because of improved operating performance. Negative rating actions
Could occur if the companys risk-adjusted capitalization becomes
Affected by large capital outflows or by weaker operating
Performance in the medium term due to large and sustained increases in
Operation and acquisition expenses or benefits paid derived from the
Expansion strategy. further, negative rating actions could result if
AM Bests view on the strategic importance of the Mexico subsidiary to
Its group decreases or if there are negative rating actions on New York
Life.

This press release relates to Credit Ratings that have been published
On AM Bests 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 Bests
Recent
Rating Activity
Web page. For additional information
Regarding the use and limitations of Credit Rating opinions, please view
Understanding
Bests Credit Ratings
For information on the proper media
Use of Bests Credit Ratings and AM Best press releases, please view
Guide
For Media – Proper Use of Bests Credit Ratings and AM Best Rating
Action Press Releases
.

AM Best is a global rating agency and information provider with a
Unique focus on the insurance industry. Visit
Www.ambest.com For more information.

Copyright 2019 by A.M. Best Rating Services, Inc. and/or its
Affiliates. ALL RIGHTS RESERVED.

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