A.M. Best Assigns Ratings to Axeria Prevoyance and Axeria Re Limited

Proquest LLC

A.M. Best Europe - Rating Services Limited has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of "a-" to both Axeria Prevoyance (AxP) (France) and Axeria Re Limited (Axeria Re) (Malta).

The outlook on all ratings is stable.

The ratings of AxP reflect its strong risk-adjusted capitalisation and established market position, which is fully supported by April S.A. (April), its ultimate parent and the holding of a group of companies specialized in insurance brokerage activities. Axeria Re is the reinsurance arm of the April group, with the sole objective of reinsuring risks either underwritten by affiliated companies or where April has full pricing control. A partially offsetting factor relates to some loss-making ventures with which April has been involved in the past, but where prompt corrective management actions have been put into place.

AxP's market profile benefits both from April's established brand and distribution channels, which remain in continuous development. The company writes corporate health and protection, individual health and credit life insurance risks. AxP's reinsurance programme is placed with Axeria Re, which, in turn, retrocedes a significant portion to the external market. A.M. Best expects that the recent change in health care legislation in France, whereby all salaried workers should be covered under a group policy, does not materially impact AxP's market position since the company anticipates a high conversion rate from individual to group business.

Both AxP's and Axeria Re's risk-adjusted capitalisation ratios are supportive of their ratings. AxP's capital position benefits from intra-group loans, a solid investment portfolio with highly liquid bonds and no European sovereign debt exposure, and by redundant reserves on some of its life products. The reinsurance programme for AxP is a combination of quota-share and excess of loss treaties with Axeria Re, supported by highly rated retrocessionaires.

Upward rating movements are unlikely at present. Downward rating movements may occur if risk-adjusted capitalisation or underwriting performance deteriorates significantly, or AxP's conversion of individual health policies to group ones is much lower than expected.