CONTACTS:
FOR IMMEDIATE RELEASE
LONDON - DECEMBER 15, 2017 12:13 PM (EST)
A.M. Best has revised the outlooks to stable from positive and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of AXA Mansard Insurance Plc (AXA Mansard) (Nigeria).
The ratings reflect AXA Mansard’s balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The revision of the outlooks to stable from positive reflects A.M. Best’s view that an upgrade of the ratings in the short term is unlikely, owing to pressure on AXA Mansard’s competitive position and prospective financial performance in an increasingly challenging operating environment.
AXA Mansard’s adequate operating performance is underpinned by consistently robust underwriting results, as demonstrated by a five-year average (2012-2016) non-life combined ratio of approximately 92% (as calculated by A.M. Best). In 2016, the company’s technical results were impacted by an increase in the expense ratio, driven by higher costs associated with the company’s growth plans, whilst net earned premiums reduced as a result of increased reinsurance protection.
A.M. Best expects AXA Mansard’s balance sheet strength to remain very strong, supported by risk-adjusted capitalisation at the strongest level sustained by good internal capital generation. Offsetting factors include moderate reinsurance dependence and the quality of assets mainly restricted to Nigeria, with a significant proportion of investments held in real estate and a special purpose vehicle. Nonetheless, A.M. Best notes that the company maintains solid liquidity levels, with a ratio of liquid assets to net technical provisions of 158% at year-end 2016.
The ratings also consider AXA Mansard’s strategic importance to AXA S.A., providing the group with access to one of the largest economies in Africa, particularly within the market’s retail segment.
The ratings also account for the company’s exposure to high levels of economic risk and very high levels of political and financial system risk associated with operating exclusively in Nigeria.
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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.