AM Best has removed from under review with negative implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of IRB Brasil Re.
The outlook assigned to these Credit Ratings is negative.
AM Best states that the ratings reflect IRB’s balance sheet strength, which it assesses as strongest, as well as its adequate operating performance, neutral business profile, and appropriate enterprise risk management.
Following the successful completion of the recapitalisation stock offer announced on the 1st of September 2022, which restored IRB’s capital position, its ratings were removed from under review with negative implications and affirmed, and the rating outlooks were assigned as negative.
AM Best writes, “The negative outlooks point to IRB’s continued adverse operating performance caused by unfavourable underwriting activities which, in turn, stem from IRB’s legacy business put in run-off and a shock loss from its agricultural line of business.”
The ratings agency will continue to monitor IRB’s management actions closely to revert operating performance trends and their effects on the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR).
