AM Best Affirms Credit Ratings of Austral Participações S.A. and Its Subsidiaries

MEXICO CITY--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of Austral Resseguradora S.A. (Austral Re) and Austral Seguradora S.A. Concurrently, AM Best has affirmed the Long-Term ICR of “bbb-” (Good) of Austral Participações S.A. The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Brazil and collectively referred to as Austral.

The ratings reflect Austral’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The stable outlooks are underpinned by AM Best’s expectation that Austral’s balance sheet strength assessment will remain at the strongest level, supported by internal capital generation and improved risk modeling.

At year-end 2025, Austral continued to show a solid capital structure, evidenced by its risk-adjusted capitalization being assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), coupled with positive bottom-line and technical results at each subsidiary.

Additionally, Austral maintains a retrocession program with highly rated counterparties as it remains dependent on reinsurance to provide additional market capacity. AM Best expects that Brazil's double-digit interest rate environment will continue to increase the contribution of Austral’s investment income to its operating results, compared with recent years, potentially helping surplus growth. While a high interest-rate environment can be viewed as positive, AM Best recognizes that the high rates are a consequence of the inflationary environment; however, the higher rates also contributed to the easing of inflation-related pressures in recent years.

AM Best views Austral’s business profile as neutral while recognizing the group’s successful efforts to create a more-diversified book of business and better geographic spread of risk over time. Austral continues to grow amid macroeconomic challenges while building its presence in the wider Latin America (re)insurance market, predominantly writing energy, surety and financial guarantee, commercial property/casualty, marine, aviation and transportation, life and liability (re)insurance lines of business for the large- and medium-size commercial segment. The group takes advantage of its reinsurance capabilities to generate profit in an underpenetrated market, ranking among the top five players in the country.

Austral has established keen risk measurement and reserve development capabilities over recent years, which translate into positive bottom-line results and differentiates the group from its competitors as recent catastrophe events impacted the profitability of the industry in which the group operates.

Positive rating actions could take place if Austral’s operating performance continues to strengthen and reduces its volatility. Negative rating actions could take place if its risk-adjusted capitalization experiences adverse impact from the recent portfolio changes.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.