By Cynthia Alo
AM Best has upgraded the outlook of Axa Mansard Insurance Plc to stable from negative. It aslo affirmed the Financial Strength Rating of B+(Good) and the Long-Term Issuer Credit Rating of “bbb-”.
The company in a statement said that the rating reflected Axa Mansard’s balance sheet strength, which it categorised as strong , as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
According to the report, ‘’The revision in outlook to stable reflects AM Best’s expectation that AXA Mansard’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), will remain at the strongest level over the medium term, benefiting from the de-risking of its investment portfolio, and that the company’s underwriting performance will gradually improve.’’
It further stated, ‘’AXA Mansard’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by BCAR. Capital consumption is significantly influenced by the company’s real estate holdings, which in 2018 equated to 73percent of its capital and surplus.
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“However, AM Best expects that AXA Mansard will significantly reduce its allocation to real estate over the medium term, which would have a positive impact on its future BCAR.”
“AXA Mansard is a composite insurer concentrated in the Nigerian market. The company has an aggressive growth strategy within the health insurance line, which in 2018 led to it becoming a market leader in this segment.
“With support from the AXA group, the company continues to take positive steps to improve and embed risk management throughout its operations, and AM Best expects the company to continue to evolve its risk management capabilities.”