AM Best has assigned a Financial Strength Rating of B (Fair) and a Long-Term Issuer Credit Rating of “bb+” (Fair) and a Mexico National Scale Rating (NSR) of “a+.MX” (Excellent) to Momento Seguros, S.A de C.V. (Momento) (Mexico). The outlook assigned to 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 Mexican insuretech established on the idea of starting an insurance company with technological advantages in contrast to other traditional companies, which started operations in July 2023. The company´s underwriting is concentrated in personal motor businesses in Mexico City, causing its business profile to be considered as limited. AM Best will monitor how products offered and its geographical presence expand as Momento’s business plan evolves, but AM Best does not expect its business profile assessment on the insurer 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 a very competitive market, 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 or projected capital infusions. However, mitigating this aspect, the company’s partners have demonstrated their commitment through capital injections to sustain Momento’s business operations.

Momento has defined policies and procedures for its investments and underwriting practices that are attached to its risk tolerance. However, AM Best considers that there is a high execution risk attached to Momento´s business plan, considering its short track record, as well as 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 foundation and its expectation to breakeven by 2026. AM Best will monitor the company’s operating results, and if there are sizeable deviations from current projections, AM Best could revise the impact of this building block 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 as a result of a thorough implementation 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 deriving in a material weakening of the company’s balance sheet strength.

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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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