LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Compagnie Belge d’Assurances Aviation S.A. (Aviabel) (Belgium). The outlook for both ratings is stable.
Aviabel has an excellent level of risk-adjusted capitalisation, boosted by strong operating profits in recent years. Whilst acknowledging that large claims or substantial investment losses could have a significant impact on future operating performance, A.M. Best expects risk-adjusted capitalisation to remain supportive of the ratings.
Aviabel has a strong underwriting record with a 5-year (2011-2015) average combined ratio likely to be around 94%, in spite of an underwriting loss in 2015 and higher expense ratios in more recent years. The higher expense ratios reflect increased staffing costs, mainly to meet the demands of Solvency II, set against a reduced level of net written premiums in challenging market conditions. Although overcapacity and generally good loss experience continue to drive down aviation premium rates, Aviabel is expected to report a good profit for 2015, albeit on a more modest scale than in recent years. A marginal technical loss, driven by a series of major losses, including the Transasia Airways crash into a river in Taipei in February and the Metrojet Airbus crash in Sinai in October, is likely to be offset by a solid level of investment income.
Aviabel has a strong specialist business profile as the leading aviation underwriter in the Benelux countries, with approximately 80% of the general aviation market, although business from these local markets accounted for only 20% of gross premiums in 2015. Aviabel’s target markets of France, Spain, Portugal, Turkey and leading lines in U.K. general aviation contributed a further 23%, while the balance of 57% was derived from worldwide markets.
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