Best’s News & Research Service - August 17, 2017 12:36 PM (EDT)
A.M. Best Affirms Credit Ratings of Terra Brasis Resseguros
- August 17, 2017 12:36 PM (EDT)
Oldwick //BestWire// - 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’ 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. Given that Terra Brasis has a short-lived operating history, A.M. Best will continue to closely monitor its performance and the overall execution of its business plan.
Partially offsetting these positive rating factors are Terra Brasis’ limited business profile and the execution risk associated with a relatively new company operating in a highly competitive environment. Furthermore, the operating environment in Brazil remains challenging due to continued macroeconomic and political turmoil. Additionally, Terra Brasis’ expense ratio remains elevated, as it continues to build out operations and scale.
Key factors that could lead to a positive rating action are sustained and stable 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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