OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb” to AXA Corporate Solutions Brasil e América Latina Resseguros S.A. (AXA CS Latam) (Brazil). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect AXA CS Latam’s solid business plan and benefits derived from being integrated into AXA S.A.’s (AXA) corporate solutions segment led by AXA CS Assurance S.A. AXA is a strong global organization with strong brand recognition, broad product offering, global systems and solid risk management infrastructure. The ratings also contemplate AXA CS Latam’s strategic importance to AXA through access to Latin America’s largest economy.
The ratings also reflect the solid intergroup reinsurance support provided to AXA CS Latam, which provides significant protection to AXA CS Latam’s balance sheet and risk-adjusted capitalization.
Despite the group’s vast resources and business plan, AXA CS Latam will be challenged to build out its operations in Brazil’s highly competitive (re)insurance market. Additionally, Brazil is mired currently in significant political and economic turmoil, which could increase operational and execution risk.
Factors that could have a positive impact on AXA CS Latam’s ratings are sustained and stable profitability, improved standalone risk-adjusted capitalization or an additional enhancement from the company’s ultimate parent.
Factors that could have a negative impact on AXA CS Latam’s ratings include the lack of support from the parent organization, sustained material volatility in operating performance or deterioration in risk-adjusted capitalization. Other factors that potentially could have a negative impact on the ratings are the company’s inability to meet its profitability targets or a downgrade of Brazil’s country risk tier.
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