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Press release content from Business Wire. The AP news staff was not involved in its creation.

AM Best Affirms Credit Ratings of IRB-Brasil Resseguros S.A.

December 16, 2021 GMT

OLDWICK, N.J.--(BUSINESS WIRE)--Dec 16, 2021--

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 IRB-Brasil Resseguros S.A. (IRB) (Rio de Janeiro, Brazil) [B3: IRBR3]. The outlook of these Credit Ratings (ratings) is negative.

The ratings reflect IRB’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 ratings also reflect AM Best’s view of IRB’s operating performance, recently impacted by prior-year reserve development stemming from natural catastrophe events, and losses from the life reinsurance line of business, which required the company to restate its 2018 and 2019 financial statements, as well as the frictional losses caused by the COVID-19 pandemic. Continued underwriting losses or adverse reserve development could further decrease operating performance or balance sheet strength assessments. Conversely, AM Best acknowledges that strategic changes are being made in IRB’s underwriting practices, which are starting to indicate a favorable path to reduce operational volatility and restore profitability. Nonetheless, IRB’s operating performance is now assessed as adequate when considered on a five-year average.

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AM Best acknowledges the recent improvements in the company’s ERM, which include the use of several liquidity instruments such as capital increase, debt issuance and the execution of several loss portfolio transfers. These improvements led to the end of IRB’s special regulatory inspection by the Superintendência de Seguros Privados (SUSEP), the Brazilian (re)insurance industry regulatory authority. As a result, IRB’s ERM is now classified as appropriate.

Despite recent operational and structural improvements, manifestation of the expected benefits of these improvements has yet to be apparent in operating performance. The negative outlooks reflect the fact that operating performance is still not accretive to IRB’s risk-adjusted capitalization.

A factor that could cause negative rating actions is a material deterioration of its operating performance, namely, prior year reserve development and underwriting activities.

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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 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 © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20211216005819/en/

CONTACT: Guilherme Monteiro Simoes

Senior Financial Analyst

+1 908 439 2200, ext. 5301

guy.simoes@ambest.comSteven M. Chirico, CPA

Director

+1 908 439 2200, ext. 5087

steven.chirico@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comJim Peavy

Director, Communications

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: NEW JERSEY NORTH AMERICA UNITED STATES EUROPE BRAZIL SOUTH AMERICA

INDUSTRY KEYWORD: INSURANCE PROFESSIONAL SERVICES

SOURCE: AM Best

Copyright Business Wire 2021.

PUB: 12/16/2021 11:26 AM/DISC: 12/16/2021 11:26 AM

http://www.businesswire.com/news/home/20211216005819/en