The risk classification agency AM Best, which works on a global scale, focused exclusively on the insurance and reinsurance sector, informed yesterday (December 08th) it removed the status “under review with negative implications” for IRB Brasil RE, and reaffirmed the Financial Strength Rating A- (Excellent) and the Long-Term Issuer Credit Rating “a-” with negative perspective, that is, the same attributed to the company in 2019.
AM Best also informs “the classifications reflect the soundness of the company’s balance sheet”, considered by the agency as “the strongest, as well as its strong operational performance, neutral business profile and marginal enterprise risk management”, needing continuous improvements.
“The ratifying of the rating A- and the removal by AM Best of the classification “under review” give the needed peace for the board to keep the procedure for stabilization and reach the company’s new normal. It also ratifies the robustness and soundness of IRB, a fact very important for renewing global contracts in the first half of 2021″, said IRB’s CEO and chairperson of the Board of Directors, Antonio Cassio dos Santos.
AM Best, according to the press release, acknowledges “strategic changes are being carried out in IRB Brasil RE’s subscription practices, and they can reduce the operational volatility and restore the profitability after the renewals of January 01st, 2021″. IRB Brasil RE’s operational performance, when a five-year average is considered, is favorable, in comparison with its peers, informed the agency.
Also according to the press release, “the negative perspective reflects AM Best’s worries on continuous pressure on the company’s operational performance and profitability, exposing, in the medium-term, the soundness of its balance sheet”, in case the trends verified in 2020 do not change, says Antonio Cássio. AM Best understands that at the same time IRB Brasil RE “keeps a possible recovery strategy, the company also faces instability in its operational results in certain business lines due to the (adverse) development of the claims from previous years, highlighting the risk of the strategy.
AM Best believes IRB Brasil RE is duly evaluated at this moment.
