AM Best has affirmed the Financial Strength Rating of B++ (Good), the Long-Term Issuer Credit Rating of “bbb” (Good) and the Mexico National Scale Rating of “aa.MX” (Superior) of Dentegra Seguros Dentales, S.A. (DSD) (Mexico). The outlook of these Credit Ratings (ratings) is stable.

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

DSD is a dental insurance company, which initiated operations in Mexico in 2007, and successfully implemented its growth strategy to achieve its break-even point within five years. The company continues to be ranked as a market leader, holding over 55% of the dental insurance market in the country. DSD operates through a network of independent agents, local brokers and other insurance companies as a complement to its medical expense plans. DSD holds commercial relationships with more than 4,000 dentists throughout Mexico. These positive factors are offset by the company’s concentration in dental and vision insurance and the niche nature of these markets.

DSD is ultimately owned by Auna S.A. (Auna), a Peruvian health-focused company founded in 1989 in Peru, which acquired 100% ownership of DSD in February 2023. Auna offers oncology treatments and other healthcare plans in Mexico, Peru and Colombia. The acquisition of DSD is part of Auna’s expansion strategy, adding dental and vision insurance to its products in Mexico.

DSD’s risk-adjusted capitalization stands at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company is susceptible to underwriting risk as it retains 100% of its premiums, followed by investment risks. DSD follows a conservative investment strategy, in line with local guidelines, which provides a steady flow of revenues.

Operating performance is considered adequate, given DSD’s track record of positive bottom-line results over the years. The company has demonstrated strong underwriting practices, and these have resulted in positive technical performance, further strengthen by investment income.

AM Best considers the company’s ERM assessment as appropriate for its risk appetite and as being strongly supported by its ERM infrastructure and practices, as well as the expertise from its management team.

The stable outlooks reflect AM Best's expectations that DSD will continue strengthening its capital base, working under its established practices and guidelines, which have historically rendered positive bottom-line results.

Positive rating actions could take place if DSD continues to grow its capital base through the reinvestment of earnings, while maintaining its risk-adjusted capitalization at the strongest level. Negative rating actions could take place should the financial position of DSD's holding company worsen, causing volatility in the company's capital base from significant capital withdrawals.

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