A.M. Best Affirms Ratings of IRB Brasil Resseguros S.A.

OLDWICK, N.J.--()--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of IRB Brasil Resseguros S.A. (IRB) (Brazil). The outlook for both ratings is stable and both ratings are based on A.M. Best’s Global Rating Scale.

The ratings reflect IRB’s strong business profile in the Brazilian reinsurance market, solid overall financial performance and excellent risk-adjusted capitalization. Since the reinsurance market opened in Brazil, IRB holds the largest market share by a wide margin, despite intense competition. In recent years, as the Brazilian reinsurance market has transitioned to a more open market, IRB has adopted various initiatives to not only maintain or conservatively increase its market share and profitability, but also to position itself for expansion outside of Brazil and Latin America. While these initiatives will help geographically diversify IRB's book of business, expansion into new markets with different underwriting exposures carries a degree of execution risk. IRB must also contend with the difficult macroeconomic and political conditions currently being experienced in Brazil.

IRB completed its privatization in 2013 when the Brazilian government reduced its stake in the company and ceased to be its sole controlling shareholder. The restructuring has begun to provide IRB with a more effective risk management infrastructure and improved operational efficiencies and agility. Overall, IRB continues to have a unique and strong position in the growing Brazilian (re)insurance market, with a defined strategy and experienced personnel to execute its international expansion. A.M. Best recognizes that IRB continues to be in a state of transition and will continue to closely monitor any developments.

Rating factors that could lead to a positive outlook or an upgrade to the rating would be a stabilization in premium growth while maintaining strong risk adjusted capitalization and operating performance, as well as successful implementation of the company's international expansion plans.

Rating factors that could change the outlook to negative or downgrade the rating would be a material decline in risk-adjusted capitalization or operating performance. Other factors that could contribute to negative rating movement include outsized underwriting or investment losses when compared with peers, unsuccessful execution of the company's international growth strategy or a downgrade in Brazil's country risk tier.

This press release relates to rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Scott Mangan
Senior Financial Analyst
(908) 439-2200, ext. 5593
scott.mangan@ambest.com
or
Greg Reisner
Assistant Vice President
(908) 439-2200, ext. 5224
greg.reisner@ambest.com
or
Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
christopher.sharkey@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

Contacts

A.M. Best
Scott Mangan
Senior Financial Analyst
(908) 439-2200, ext. 5593
scott.mangan@ambest.com
or
Greg Reisner
Assistant Vice President
(908) 439-2200, ext. 5224
greg.reisner@ambest.com
or
Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
christopher.sharkey@ambest.com
or
Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com