OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a financial strength rating of B++ (Good) and an issuer credit rating of “bbb+” to BTG Pactual Resseguradora S.A. (BTG Re) (Brazil). The outlook assigned to both ratings is stable.
The ratings of BTG Re reflect its strong risk-adjusted capitalization, parental support and management's comprehensive business plan. BTG Re is classified as a local reinsurer in Brazil that currently focuses on surety and engineering risks with plans to expand geographically and by line of business. The company's parent, Banco BTG Pactual S.A. (BTG Pactual) has provided capital support, as well as operational and risk management capabilities. BTG Re also will benefit from the favorable brand recognition of BTG Pactual in Brazil and other Latin America markets where it intends to operate.
Partially offsetting these positive rating factors are BTG Re's limited operating history, developing business profile and market acceptance in its targeted markets during its initial years of operation. Furthermore, the Brazilian (re)insurance market is highly competitive with domestic and global reinsurers continuing to enter the market. Additionally, BTG Re, which has initially served as a captive reinsurer for its sister company, BTG Pactual Seguradora S.A., will be challenged to develop and expand its product offerings in its local markets as well as other territories in Latin America, each with their own unique market dynamics.
A.M. Best will closely follow BTG Re's operating performance, risk-adjusted capitalization and the execution of its business plan, in particular its product and geographic expansion. Positive rating factors would include maintaining strong risk-adjusted capitalization, consistent favorable operating performance and an improvement in Brazil's country risk tier. Negative rating triggers would include the inability to execute its proposed business plan, a decline in risk-adjusted capitalization, unfavorable operating results, a downgrade in Brazil's country risk tier or instability at the parent level.
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 utilized:
- Evaluating Non-Insurance Ultimate Parents
- Evaluating Country Risk
- Rating Surety Companies
- Risk Management and the Rating Process for Insurance Companies
- Understanding BCAR for Property/Casualty Insurers
- Understanding Universal BCAR
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.
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