AM Best Affirms Credit Ratings of Momento Seguros, S.A. de C.V.

AM Best has affirmed the Financial Strength Rating of B (Fair), the Long-Term Issuer Credit Rating of “bb+” (Fair) and the Mexico National Scale Rating of “a+.MX” (Excellent) of Momento Seguros, S.A. de C.V. (Momento) (Mexico). The outlook of these Credit Ratings (ratings) is stable.

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

Momento is a Mexico-based insurtech that started operations in July 2023 and was established to offer insurance products, but with technological advantages over other traditional companies in its market. The company´s underwriting is concentrated in personal motor businesses in Mexico City, causing its business profile to be considered as limited. During 2024, the company expanded its operation to other states inside the central area of Mexico, AM Best will monitor how the company’s products are offered as its geographical presence expands, but it does not expect Momento’s business profile assessment to shift over the medium term.

Momento’s balance sheet strength assessment of strong reflects its capital size in contrast to its risk exposure, characterized by its low business retention, conservative investment portfolio and a superior security level in the participants of its reinsurance program. Conversely, Momento’s material premium growth prospects in very competitive markets, such as the auto segment, could put pressure on capital adequacy levels, as measured by Best’s Capital Adequacy Ratio (BCAR), in the medium term if there are important deviations from its business plan.

Momento has defined policies and procedures for its investments and underwriting practices that are attached to its risk tolerance. However, AM Best notes that there is a high execution risk attached to Momento’s business plan considering its short track record and the market dynamics of the auto segment; therefore, AM Best’s ERM assessment is marginal.

Operating performance is considered adequate given the company’s recent start of operations and its expectation to breakeven by 2027. AM Best will monitor the company’s operating results, and if there are sizeable deviations from current projections, AM Best could revise its operating performance assessment in the short term.

The stable outlooks reflect AM Best’s expectation that Momento will adequately manage its capital base to consistently face its risks as the strategy and experience of the company evolves.

Positive changes in the ratings could take place with completion of the ERM framework in order to mitigate Momento’s implementation risk. Conversely, negative rating actions could take place if there are shortfalls in the implementation of the strategy that cause a material weakening of the company’s balance sheet strength.

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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