Rating agency, AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of AXA Mansard Insurance Plc Nigeria.
The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect AXA Mansard’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings also reflect rating enhancement, in the form of lift, from AXA Mansard’s ultimate parent, AXA S.A.
AXA Mansard’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR).
Capital consumption is primarily driven by asset risk, which incorporates the company’s substantial real estate investments.
With its business concentrated domestically, AXA Mansard is exposed to the high levels of economic, political and financial system risks in Nigeria.
The balance sheet strength assessment also considers AXA Mansard’s high reinsurance dependence on large energy and property risks.
AXA Mansard is expected to report a five-year (2018-2022) weighted average combined ratio of approximately 97 per cent, with the company’s combined ratio deteriorating to marginally above 100 per cent in 2022.
Increased loss experience on the company’s health book, much of which related to the 2021 underwriting year, is expected to drive the weakening underwriting performance.
AM Best expects prospective operating performance to be supported by corrective underwriting measures in the health portfolio, as well as positive contributions from the company’s life book.
AXA Mansard is a composite insurer, writing a diverse book of business that is concentrated in Nigeria.
The company has a solid foothold in its domestic market where it ranks among the largest non-life companies, and it enjoys a leading market position in the health segment. With good long-term growth prospects, AXA Mansard is expected to further strengthen its competitive market position over the coming years.