A.M. Best Affirms Ratings of Axeria Prévoyance and Axeria Re Limited

LONDON--()--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Axeria Prévoyance (AxP) (France) and Axeria Re Limited (Axeria Re) (Malta). The outlook of all ratings remains stable.

The ratings of AxP reflect its strong risk-adjusted capitalisation and established market position, which is fully supported by April S.A. (April), its ultimate parent and the holding company of a group of companies specialised in insurance brokerage activities. Axeria Re is the reinsurance arm of the April group, with the sole objective of reinsuring risks either underwritten by affiliated companies or where April has full pricing control. Its ratings factor in its strategic importance within the April group. A partially offsetting factor relates to some loss-making ventures that April has been involved with in the past, but where prompt corrective management actions have been put into place.

AxP’s market profile benefits from April’s established brand and distribution channels, which remain in continuous development. The company writes corporate health and protection, individual health and credit life insurance risks. AxP’s reinsurance programme is partly placed with Axeria Re, which, in turn, retrocedes a significant portion of the business to the external market. A.M. Best expects that the recent changes in health care legislation in France, “ANI”, whereby all salaried workers should be covered under a group policy by 1 January 2016, and the “Hamon” law, which should enable greater flexibility for the policyholders to switch their loan insurance, represent opportunities for AxP, whilst constituting a good test of April’s distribution model.

AxP’s and Axeria Re’s risk-adjusted capitalisation ratios are supportive of their ratings. AxP’s capital position benefits from intra-group loans, a solid investment portfolio with highly liquid bonds and no peripheral European sovereign debt exposure, whilst having redundant reserves on some of its life products.

Axeria Re’s capital base has not grown over recent years, as a result of the group’s decision to upstream the company’s profits to its parent, April Mediterranean Limited (April Med), for a more efficient capital management. In return, Axeria Re benefits from formal capital commitment from April Med.

Upward rating movements are unlikely at present for AxP and AxRe.

Downward rating movements could occur if the risk-adjusted capitalisation or underwriting performance of AxP or Axeria Re deteriorates significantly, or if AxP’s market profile suffers as a result of the regulatory changes implemented in France.

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.

Key insurance criteria reports utilised:

  • Catastrophe Analysis in A.M. Best Ratings
  • Equity Credit for Hybrid Securities
  • Rating Members of Insurance Groups
  • Risk Management and the Rating Process for Insurance Companies
  • Understanding Universal BCAR

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

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 visit A.M. Best’s Ratings & Criteria Center.

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

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Ghislain Le Cam, CFA, +(44) 20 7397 0268
Associate Director, Analytics
ghislain.lecam@ambest.com
or
Carlos Wong-Fupuy, +(44) 20 7397 0287
Senior Director, Analytics
carlos.wong-fupuy@ambest.com
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Ghislain Le Cam, CFA, +(44) 20 7397 0268
Associate Director, Analytics
ghislain.lecam@ambest.com
or
Carlos Wong-Fupuy, +(44) 20 7397 0287
Senior Director, Analytics
carlos.wong-fupuy@ambest.com
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com