Best’s News & Research Service - September 19, 2024 11:52 AM (EDT)
AM Best Assigns Credit Ratings to BTG Pactual Seguros S.A.
- September 19, 2024 11:52 AM (EDT)
//BestWire// - AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb+” (Good) to BTG Pactual Seguros S.A. (BTG Seguros) (Brazil). The outlook assigned to these Credit Ratings (ratings) is stable.
These ratings reflect BTG Seguros’ balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The stable outlooks are underpinned by the company's ability to maintain a very strong balance sheet strength assessment, supported by the positive performance of its holding company and the initiatives implemented by management.
BTG Seguros is a domestic insurer in Brazil, operating predominantly in the country’s surety segment. The company takes advantage of the business profile and market presence of its affiliated company, BTG Pactual Resseguradora S.A., to which it cedes almost all of its risk. The company’s parent, Banco BTG Pactual S.A. (BTG Pactual) [B3: BPAC11], provides operational support and risk management capabilities and can provide liquidity if needed.
Also reflected in BTG Seguros’ ratings is the impact of BTG Pactual’s credit profile and Brazil’s challenging and volatile macroeconomic and political environment, which continues to hamper meaningful recovery and stability in the country. BTG Pactual has shown consistent improvement in its results and credit strength while expanding and diversifying its operations; however, BTG Seguros’ ratings are limited somewhat by its domestic operating environment.
BTG Seguros maintains adequate standalone attributes in terms of operating performance, including low loss and expense ratios, and the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). BTG Seguros has produced positive earnings in recent years, mainly driven by investment income. AM Best’s analysis of BTG Seguros benefits from BTG Pactual’s expertise, stemming from its long track record with a portfolio of large companies.
AM Best will monitor BTG Seguros’ balance sheet strength, operating performance, risk-adjusted capitalization and the execution of its product and geographic expansion, along with the credit profile of its parent.
Negative rating actions could take place if there is a deterioration in the company's risk adjusted capitalization due to major capital outflows. Also, negative rating actions could take place if the company's strategic relevance for the group diminishes. Although it is unlikely, positive rating actions could take place if the company continues to sustain a minimum strongest level of balance sheet strength.
The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Aug. 29, 2024), 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 (June 6, 2024)
· Understanding Global BCAR (Aug. 1, 2024)
· Available Capital and Insurance Holding Company Analysis (Aug. 15, 2024)
· Rating Surety Companies (April 25, 2024)
· Scoring and Assessing Innovation (Feb. 27, 2023)
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, relevant sources of information and the frequency for updating ratings, please refer to Guide to Best’s Credit Ratings.
· Previous Rating Date: Not Rated
· Initial Rating Date: Sept. 19, 2024
· Date Range of Financial Data Used: Dec. 31, 2019 – June 30, 2024
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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.
If the ratings referred in this press release do not indicate a specific country suffix, it is understood that they are granted globally and not on a national scale.
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. AM Best keeps certain activities of its business units separate from each other to preserve the independence and objectivity of their respective activities. As a result, certain business units of AM Best may have information that is not available to other AM Best business units. AM Best has established policies and procedures to maintain the confidentiality of certain confidential (non-public) information received in connection with each analytical process. 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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.