OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Terra Brasis Resseguros (Terra Brasis) (Brazil). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect Terra Brasis’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The ratings reflect Terra Brasis’ conservative management philosophy and solid risk-adjusted capitalization. Additionally, Terra Brasis has begun to establish a diversified book of business, writing a balanced mix of non-life and life business. Terra Brasis is licensed as a local reinsurance company in Brazil, which provides the company some competitive advantages over its peers designated as admitted or occasional.
In light of Terra Brasis’ somewhat short-lived operating history, underwriting performance has been impacted negatively by its expense ratio. A.M. Best will continue to monitor closely its performance and economies of scale in a competitive but still under-penetrated market. Furthermore, the operating environment in Brazil remains challenging due to continued macroeconomic and political turmoil.
Key factors that could lead to a positive rating action are sustained and improved profitability, increased risk-adjusted capitalization and signs that the company has built a solid market profile.
Conversely, factors that could lead to a negative rating action are a material decline in risk-adjusted capitalization, and the inability of the company to successfully execute its business plans and gain market acceptance.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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