AM Best


A.M. Best Affirms Ratings of Austral Resseguradora S.A.


CONTACTS:

Scott Mangan
Senior Financial Analyst
(908) 439-2200, ext. 5593
scott.mangan@ambest.com

Peter Dickey
Assistant Vice President
(908) 439-2200, ext. 5053
peter.dickey@ambest.com
Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - SEPTEMBER 23, 2015 03:20 PM (EDT)
A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb+” of Austral Resseguradora S.A. (Austral Re) (Brazil). The outlook for both ratings is stable.

The ratings reflect Austral Re’s more than adequate risk-adjusted capitalization, comprehensive retrocessional program and the successful implementation thus far of the company’s business plan. Additionally, in its first years of operations, Austral Re has produced positive overall earnings driven by a steady stream of investment income, as well as positive underwriting income, which has allowed the company to grow surplus through retained earnings.

Partially offsetting these positive rating factors are Austral Re’s limited operating history and developing business profile, as well as operational uncertainty the company faces in its initial years of operation. Furthermore, the Brazilian (re)insurance market is under a relatively new regulatory regime and is highly competitive with both indigenous and global reinsurers continuing to enter the market. The high level of competition is driven by the significant growth potential of Brazil’s market, which is the largest reinsurance market in Latin America.

A.M. Best will continue to closely follow Austral Re’s operating performance, risk-adjusted capitalization and the execution of its business plan and risk management program.

Positive rating drivers include continued strong risk-adjusted capital, superior underwriting results when compared to a peer group over the medium term, and strong brand recognition in Brazil and abroad. Negative rating drivers include a significant decline in risk-adjusted capital, poor operating results when compared to its peers, large losses and significant deterioration of the Brazilian economy or a sovereign downgrade that could negatively impact the company’s investment portfolio, premium growth and ability to pay claims.

This press release relates to rating(s) 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 visit A.M. Best’s Ratings & Criteria Center.

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AMB# Company Name
092459 Austral Resseguradora S.A.