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AM Best has affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of “bb+” (Fair) to Austral Participações SA (Austral). The outlook of this Credit Rating (rating) is positive. Concurrently, AM Best has affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICR of “bbb+” (Good) of Austral Resseguradora SA (Austral Re) and Austral Seguradora SA The outlook of these ratings is positive. All companies are domiciled in Brazil, and collectively are referred to as Austral.
The ratings reflect Austral’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The positive outlooks are underpinned by AM Best’s expectation that Austral’s balance sheet strength will remain solid, supported by strong internal capital generation, the recent reduction of its catastrophe exposures and continued improvement and stabilization of its operating performance, as its exposure to climate-related catastrophe reinsurance was significantly reduced. These lines generated volatility for Austral’s operations in 2019 and 2020. In 2021, the company demonstrated the initial benefits of its business portfolio adjustments. However, balance sheet strength continues to be assessed at the very strong level, despite the fact that its risk-adjusted capitalization, as measured by the Best’s Capital Adequacy Ratio (BCAR), scored at the strongest level. During the current year, AM Best will be monitoring the stability …
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