A.M. Best has affirmed the Financial Strength Rating of A-(Excellent), the Long-Term Issuer Credit Rating (Long-Term ICR) of"a-" and the Mexico National Scale Rating of "aa.MX" of (QBE de Mexico) (Mexico). The outlook of these Credit Ratings (ratings) isstable.

The ratings reflect QBE de Mexico's strong risk-adjustedcapitalization, as measured by Best's Capital Adequacy Ratio (BCAR), improvingoperating performance, continued conservative investment strategy and improvedreinsurance support from the QBE Group. The ratings also recognize QBE deMexico's affiliation and strategic importance to its ultimate parent, QBE InsuranceGroup Limited, a leading property/casualty (P/C) insurer in Australia andworldwide, through QBE Latin America Insurance Holdings, S.L., which providessynergies and operating efficiencies. Offsetting these positive rating factors arethe company's relatively small size within Mexico's very competitive P/Csegment and the continued volatility in its operating results due to severitynature of its insurance portfolio, although recent adjustments in itsreinsurance program should help stabilize profitability metrics in the short tomidterm.

The company, founded in Mexico more than 70 years ago, wasacquired by QBE Insurance Group Limited in 2007. QBE de Mexico underwrites P/Cinsurance and ranked 21st in this segment with less than a 1% market share basedon written premiums in 2015. The company operates mainly through a network oflocal brokers, along with independent agents and major trading partners.