A.M. Best has assigned a financial strength rating of A (Excellent) and an issuer credit rating of “a” to Allianz Global Corporate & Specialty Resseguros Brasil S.A. (ACGS Re Brazil) (Brazil). The outlook assigned to both ratings is stable.
The ratings reflect ACGS Re Brazil’s solid business plans, adequate risk-adjusted capital and an existing client base in the market that provides a balanced book of business. ACGS Re Brazil is licensed as a “local” reinsurance company in the Brazilian market. Its ratings are enhanced by its affiliation with an organization with a global matrix network, global knowledge including broad product offerings, global systems and best practices. In addition, the ratings also consider the vast financial capital and operational resources—including intellectual capital—that are provided as being part of a strong global organization.
Partially offsetting these positive rating attributes are the numerous companies that have entered the Brazilian reinsurance market in recent years, making it a highly competitive environment. In addition, as the Brazilian reinsurance market is still somewhat in a state of flux, the potential for regulatory changes exists, which could negatively impact ACGS Re Brazil.
In recent years, the Brazilian reinsurance market has transitioned to a more open market. In Latin America, Brazil is the largest (re)insurance market, and the country currently has a favorable economic environment that represents significant growth potential.
Rating factors that could lead to an upgrading of the ratings or a positive outlook would include sustained and stable operating profitability coupled with strong risk-adjusted capital. The ratings could also have positive momentum if there is additional parental support, whether it is implicit or explicit. Factors that could lead to a downgrading of the ratings or negative outlook include weakened risk-adjusted capital, volatile operating results and the inability of the company to meet its profitability targets outlined in its business plans or a reduction in support from its parent.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
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Greg Reisner, 908-439-2200, ext. 5224
Managing Senior Financial Analyst
Peter Dickey, 908-439-2200, ext. 5053
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations