Ongoing violence by criminal groups in Mexico — which disrupted travel and targeted businesses in Puerto Vallarta over the weekend — could pose serious challenges for a country where tourism accounts for roughly 10% of the economy, according to a new commentary from AM Best.
The unrest not only rattled visitors but also raised fresh concerns about the broader economic fallout, putting one of Mexico’s most vital industries squarely in the spotlight.
The violence erupted on Sunday, Feb. 22, reportedly in retaliation for the killing of powerful cartel leader Nemesio Oseguera Cervantes, who was wanted in the United States. The incident quickly escalated, sending shockwaves through the region and intensifying fears of further unrest.
“Although flights are expected to resume at Guadalajara and Puerto Vallarta’s airports…, it may take more time for cruise ships to resume visits, and the event in the longer term may dissuade tourists from visiting oceanside resort areas on Mexico’s west coast,” according to Carlos De la Torre, managing director of operations of AM Best’s Mexico-based subsidiary.
While the full impact of the violence has yet to unfold, prolonged unrest could deepen the pressures already weighing on Mexico’s insurance sector, he warned. Mexico faces moderate economic and financial system risks, compounded by elevated political risk — a volatile mix that could further strain insurers if instability persists.
He cautioned that if the unrest spreads or drags on, it could quickly become a major test for Mexican President Claudia Sheinbaum, putting her leadership under intense scrutiny at a pivotal moment for the country.
Negative Outlook
AM Best maintains a negative outlook on Mexico’s insurance sector, which depends heavily on reinsurance to manage risk and shore up capital. De la Torre noted that global reinsurers have recently renewed their interest in the region, even as market pricing trends downward — a dynamic that could reshape the competitive landscape at a particularly fragile time.
“Although the insurance market is expected to grow, the rate of growth likely will slow as compared with the previous two years, hampered in part by a slowing economy,” he said.
“Additionally, the elimination of ‘fiscal credit,’ resulting from value added tax (VAT) paid by insurers to third parties when paying claims to policyholders, may potentially erase 40% of expected net profits for 2025,” De la Torre said.
He explained that insurers are rethinking their strategies to cushion the impact of these shifts — moves that could accelerate the pullback in financial products already unfolding in 2025. If the trend continues, consumers and businesses alike may soon feel the squeeze.
He added that a prolonged low-interest-rate environment is likely to inject even more volatility into insurers’ 2026 results, creating fresh uncertainty for an industry already navigating shifting market conditions.
Photograph: Pedestrians pass a burned-out vehicle left smoldering along a roadway in Cointzio, Michoacán, on Sunday, Feb. 22, 2026, in the aftermath of the reported death of Nemesio Rubén Oseguera Cervantes — the powerful leader of the Jalisco New Generation Cartel known as “El Mencho.” The charred wreckage stands as a stark symbol of the unrest that rippled across the region. (AP Photo/Armando Solis)
