AM Best Revises Outlooks to Stable, Affirms Credit Ratings of IRB-Brasil Resseguros S.A.

MEXICO CITY--(BUSINESS WIRE)--
AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of IRB-Brasil Resseguros S.A. (IRB) (Rio de Janeiro, Brazil).

The Credit Ratings (ratings) reflect IRB’s balance sheet strength, which AM Best assesses at the strongest level, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

AM Best’s concerns with the company’s capital adequacy have been mitigated to some degree following the completion of its capitalization offer and improvement in its risk-adjusted capitalization levels, as measured by Best’s Capital Adequacy Ratio (BCAR). The stable outlooks are underpinned by AM Best’s expectation that the company’s balance sheet strength will remain at the strongest level, supported by a sustained improving trend in its operating performance and the benefits from initiatives implemented by its management.

IRB’s surplus has grown over the past five to six years and its BCAR scores are in the top category for a company at its rating level. The company’s balance sheet also benefits from protection via a retrocession program with highly rated reinsurers that limits IRB's net exposures to manageable levels.

AM Best assesses IRB’s operating performance as adequate due to the changes in its results. Throughout 2024, the company has improved its operating performance through refining its portfolio, which aided in the recovery from its performance in prior years supported by a change in the company’s culture.

IRB is the dominant reinsurance market participant in Brazil. As of December 2023, IRB had an almost 33% share of Brazil’s domestic reinsurance market. IRB ranked in the mid-range of AM Best’s most recent Global Reinsurance Top 50 ranking for 2023 at No. 11 (based on IFRS 17).

AM Best acknowledges that IRB has taken many steps to reinforce its ERM and governance structure, and these improvements helped stabilize its operations. AM Best recognizes that the changes continued to show a trend of improvement in the company’s underwriting performance.

A factor that could lead to negative rating action are Brazil’s macroeconomic conditions, which could contribute further to a deterioration of IRB’s operating performance and become an obstacle to its ability to raise capital if needed. While no positive rating actions are foreseen in the short term, a positive impact could take place if the company continues to show improvements in its operating performance by implementing its transformation strategy.

The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Aug. 29, 2024), which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Evaluating Country Risk (June 6, 2024)

• Understanding Global BCAR (Aug. 1, 2024)

• Catastrophe Analysis in AM Best Ratings (Feb. 8, 2024)

• Available Capital and Insurance Holding Company Analysis (Aug. 15, 2024)

• Scoring and Assessing Innovation (Feb. 27, 2023)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best’s Credit Ratings.

• Previous Rating Date: Nov. 9, 2023
• Initial Rating Date: Dec. 13, 2011
• Date Range of Financial Data Used: Dec. 31, 2019-June 31, 2024

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to rating(s) that have been published on AM Best's website. For additional 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.

If the ratings referred in this press release do not indicate a specific country suffix, it is understood that they are granted globally and not on a national scale.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. AM Best keeps certain activities of its business units separate from each other to preserve the independence and objectivity of their respective activities. As a result, certain business units of AM Best may have information that is not available to other AM Best business units. AM Best has established policies and procedures to maintain the confidentiality of certain confidential (non-public) information received in connection with each analytical process. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, 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 © 2024 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/20240906624152/en/

Ricardo Rodríguez

Financial Analyst

+52 55 9085 2708

ricardo.rodriguez@ambest.com

Alfonso Novelo
Senior Director, Analytics

+52 55 9085 7501

alfonso.novelo@ambest.com

Christopher Sharkey
Associate Director, Public Relations

+1 908 882 2310

christopher.sharkey@ambest.com

Al Slavin
Senior Public Relations Specialist

+1 908 882 2318

al.slavin@ambest.com

Source: AM Best