AM Best Rating Services, global credit rating agency exclusively focused on the insurance and reinsurance sector, disclosed today (May 29th) the change in IRB Brasil Re’s Financial Strength Rating from “A” (Excellent) to “A-” (Excellent), and its Long Term Issuer Credit Rating from “a” to “a-“. In addition to it, AM Best kept the status under revision with negative implications on such credit ratings.
The Financial Strength is the same IRB Brasil RE held before the last revision, in May 2019. AM Best considered the ratings reflect IRB’s balance sheet soundness, classified as “stronger”, as well as its strong operational development, neutral business profile and marginal enterprise risk management (ERM).
The change in the rating reflects a revision in AM Best’s view on the risk management of the company. When commenting the decision by the Superintendence of Private Insurance (Susep) to set a Special Inspection, AM Best said it “believes IRB has financial resources and management capability to avoid such regulatory ungrouping.”
“We understand the change as an answer to the actions the company has carried out and disclosed over the last few weeks, focused on providing transparency to the market on all the aspects of the company”, says Antonio Cassio dos Santos, chairperson of the Board and IRB Brasil RE’s CEO. “The fact we maintain a risk classification considered Excellent proves an acknowledgment of the management of the company, which, in the last few weeks, has promoted a revision of all its Corporate Governance structure.”
Since March 2020, the company has strengthened its organizational structure, appointing new CEO, CFO & IRO and CRO while it also reorganized its operational team. In addition to that, IRB Brasil RE indicated a new Reinsurance vice-president, and is proposing the creation of four new positions provided for in the articles of incorporation, to be approved in the Special Meeting of Shareholders on June 12th, 2020.
Moreover, some changes in the Board of Administration were made, with the composition of six new permanent members, one under approval from a total of eight. As the company has a corporation status, the composition of the new Board of Administration shall have seven independent members, all experts on different areas, being references in the Brazilian market, who fulfill the independence criteria set by Brazilian law and the international diversity standards.