Best’s News & Research Service - July 01, 2016 12:01 PM (EDT)
A.M. Best Affirms Ratings of Two AXA S.A. U.S. P/C Subsidiaries, Withdraws Ratings of AXA Art Insurance Corporation
- July 01, 2016 12:01 PM (EDT)
Oldwick //BestWire// - A.M. Best has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit rating (ICR) of “a+” of AXA Insurance Company (AXA Insurance) (New York, NY), and affirmed the FSR of B++ (Good) and the ICR of “bbb” of Coliseum Reinsurance Company (Coliseum Re) (Wilmington, DE). The outlook for each of these ratings is stable. In addition, A.M. Best has downgraded the FSR to A- (Excellent) from A (Excellent) and the ICR to “a-” from “a” of AXA Art Insurance Corporation (AXA Art) (New York, NY). The outlook for each of these ratings has been revised to stable from negative. Concurrently, A.M. Best has withdrawn the ratings of AXA Art at the company’s request. All of the above companies are U.S. subsidiaries of AXA S.A. (AXA) [OTC: AXAHY.PL].
The downgrade of the ratings for AXA Art reflects the significant change in the company’s business profile since it essentially entered into a run-off status in 2014. AXA Art, which specializes in writing insurance coverage for fine art, has sold the renewal rights to AXA Art Americas Corporation, an affiliated controlling producer for AXA Insurance. All new and renewal policies for fine art will be written on the paper of AXA Insurance. The final phase of the transfer of AXA Art’s business will be its Canadian operation, which is expected to conclude in 2016. However, the balance sheet remains strong, operating cash flows are expected to be positive and the investment portfolio remains highly liquid.
The ratings for AXA Insurance are reflective of its strong risk-adjusted capitalization, solid underwriting fundamentals and overall operating profitability. The company serves as AXA’s primary U.S. insurer of reverse flow business representing the domestic portion of multinational accounts generated by AXA affiliates. As noted, AXA Insurance is now the primary direct writer of the AXA organization’s fine arts coverage in the United States.
Coliseum Re remains in run-off status. The company continues to maintain adequate capitalization and liquidity relative to its remaining liabilities.
A.M. Best believes the ratings for these companies are well-positioned at their current level. The ratings of these companies may be downgraded if risk-adjusted capitalization significantly weakens, if underwriting performance trends negatively from either an increase in claims frequency or severity, from adverse reserve development, or if the implicit or explicit support provided by AXA S.A. diminishes.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all 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 A.M. Best’s Recent Rating Activity web page.
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