Press Release - DECEMBER 05, 2018

AM Best Assigns Credit Ratings to AVLA Perú Compañía de Seguros S.A.


CONTACTS:
 Elí Sánchez
Senior Financial Analyst
+52 55 1102 2720, ext. 108
eli.sanchez@ambest.com

Alfonso Novelo
Senior Director, Analytics
+52 55 1102 2720, ext. 107
alfonso.novelo@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

MEXICO CITY - DECEMBER 05, 2018
AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb” to AVLA Perú Compañía de Seguros S.A. (AVLAP) (Lima, Peru). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect AVLAP’s balance sheet strength, which AM Best categorizes as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

AVLAP is a Peruvian property/casualty insurer constituted in 2015, specialized in surety, with complimentary lines of credit insurance and engineering, ranking eighth among the non-life insurance segment in Peru and third among the surety market.

AM Best considers AVLAP’s business profile as neutral to the rating. Since its creation in 2015, AVLAP has been able to successfully exploit a guarantee market with limited capacity in Peru, becoming one of the main participants for credit insurance and surety. The company’s recent creation and current development of its niche market still leaves room for implementation risk, which in AM Best’s view, is mitigated partially by the thus far successful implementation of its business plan. Additionally, AM Best’s assessment of the company’s business profile is limited by the small size of the operation within a small segment in a Best’s Country Risk Tier 3 country.

AM Best considers the company’s operating performance to be adequate despite its recent creation.

AVLAP has been able to promote its products in a profitable manner and maintain adequate underwriting metrics; however, the operation remains small and needs to converge to an adequate and less volatile cost structure. Operating performance and balance sheet strength are strongly supported by a reinsurer panel with excellent security.

AVLAP’s balance sheet assessment is strong given its solid capital base for the risks it undertakes, as reflected in its strong risk-adjusted capitalization. The strong assessment also recognizes the willingness and proven history of capital contributions made by its shareholders to support AVLAP’s growth.

The stable rating outlooks reflect the company’s growth prospects, supported by the willingness of its shareholders to continue to support the company’s commercial and financial development with capital contributions.

Positive rating actions could take place if the company continues to develop its business in a profitable and planned fashion, while further strengthening its capital base and maintaining adequate underwriting. Negative rating actions could take place if the company fails to profitably achieve its growth objectives while at the same time affecting its risk adjusted capitalization. Additionally, if there are important capital outflows to its holding company that weaken AVLAP’s risk-adjusted capitalization, the ratings could be downgraded.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of AM Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:


  • Evaluating Country Risk (Version Oct. 13, 2017)

  • Understanding Universal BCAR (Version May 14, 2018)

  • Available Capital & Holding Company Analysis (Version Oct. 13, 2017)

  • Rating New Company Formations (Version Oct. 13, 2017)

  • Rating Surety Companies (Version Oct. 13, 2017)

View a general description of the policies and procedures used to determine credit ratings. For information on the meaning of ratings, structure, voting and the committee process for determining the ratings and monitoring activities, please refer to Understanding Best’s Credit Ratings.


  • Previous Rating Date: Not Rated.

  • Date of Financial Data Used: Sept. 30, 2018

This press release relates to rating(s) that have been published on AM Best’s website. For additional rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page.

AM Best does not validate or certify the information provided by the client in order to issue a credit rating.

While the information obtained from the material source(s) is believed to be reliable, its accuracy is not guaranteed. AM Best does not audit the company’s financial records or statements, or otherwise independently verify the accuracy and reliability of the information; therefore, AM Best cannot attest as to the accuracy of the information provided.

AM Best’s credit ratings are independent and objective opinions, not statements of fact. AM Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. AM Best’s credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

AM Best receives compensation for interactive rating services provided to organizations that it rates. AM Best may also receive compensation from rated entities for non-rating related services or products offered by AM Best. AM Best does not offer consulting or advisory services. For more information regarding AM Best’s rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the AM Best Code of Conduct. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.


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AMB# Company Name
095168 AVLA Perú Compañia de Seguros S.A.