MEXICO CITY--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa” (Superior), of Allianz Global Corporate & Specialty Resseguros Brasil S.A. (AGCS Re Brazil) (São Paulo, Brazil). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect AGCS Re Brazil’s strategic importance as a subsidiary of Allianz SE (Allianz) that on a consolidated basis has a balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, very favorable business profile and appropriate enterprise risk management.
The stable outlooks are underpinned by AM Best’s expectation that risk-adjusted capitalization will remain at the strongest level as measured by Best’s Capital Adequacy Ratio (BCAR), supported by conservative capital management and excellent financial flexibility. The group is expected to remain one of the leaders in the global insurance market and continue to demonstrate stable and strong operating performance, supported by superior diversification by line of business and geography, as well as continued technical discipline.
Allianz is one of the world’s largest insurance groups, with superior diversification in geography and business, as well as leading positions in many developed and emerging markets, offering a complete range of life and non-life insurance products and asset management services. Its competitive position is supported by its scale, strong management capabilities, dynamic strategy and strong brand.
AGCS Re Brazil’s operations and management, which are fully integrated with Allianz, have demonstrated a track record of supporting the group’s strategy, providing access to the Brazilian reinsurance market as a local reinsurer. The group’s competitive advantages include the opportunity of expansion in Latin America by serving as a regional hub and the exploitation of commercial and operational opportunities, as well as synergies with Allianz’s retail entities in Brazil, Argentina, Colombia and México. The company specializes in offering reinsurance coverages across a broad spectrum of categories in life and property/casualty.
Operating performance is characterized by consistently positive bottom-line results, derived from the company’s well-diversified business portfolio. Underwriting practices are sound, and benefit from the synergies provided by the group through the rest of Allianz’s financial entities, which have enabled AGCS Re Brazil to contain operating expenses.
AM Best expects the group’s risk-adjusted capitalization, as measured by BCAR, to continue to be supported by the intragroup excess of loss reinsurance contracts and its stop loss agreement. AGCS Brazil’s operations are clearly identified as part of the wider Allianz group and the Allianz Global Corporate & Specialty segment.
If there are negative rating actions on the main operating subsidiaries of Allianz, as a result of weakening in risk-adjusted capitalization, or a sustained deterioration of operating performance, the ratings of AGCS Re Brazil would mirror those same actions. Positive rating actions are unlikely in the near term. Over a longer term, positive rating actions could arise if Allianz outperforms its peers in terms of operating results for an extended period of time and demonstrates strengthening of its key rating fundamentals to a standard commensurate with a higher rating level. A change in AM Best’s perception regarding the strategic importance of AGCS Re Brazil to the group also could impact the company’s ratings.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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