Best's News


Best’s News & Research Service - June 14, 2024 03:25 PM (EDT)

AM Best Affirms Credit Ratings of AVLA Perú Compañía de Seguros S.A.

  • June 14, 2024 03:25 PM (EDT)
    print icon

//BestWire// - AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of AVLA Perú Compañía de Seguros S.A. (AVLA) (Lima, Peru). The outlook of these Credit Ratings (ratings) is stable.

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

The stable outlooks reflect AM Best’s expectation that the company will continue to adjust to the market conditions profitably while maintaining sound capitalization.

AVLA is a Peru-based property/casualty insurer that began operations in 2015. The company specializes in surety, and complimentary lines of credit insurance and engineering, with the recent addition of a property line, in September 2023; AVLA remains in the top 10 among non-life carriers in Peru and top three in the country’s surety segment, based on market share.

AM Best views AVLA’s business profile as neutral. Since its creation in 2015, AVLA has capitalized successfully on Peru’s guarantee market, which has limited capacity, and become one of the country’s main participants for credit insurance and surety. AM Best’s neutral assessment of the company’s business profile reflects the size of its operation within a small segment in Peru, which currently is in Country Risk Tier 3, per AM Best’s country risk evaluation.

AM Best considers the company’s operating performance to be adequate. AVLA has been able to promote its products in a profitable manner and maintain adequate underwriting performance since 2017, taking proactive steps to manage claims due to market events and developing alternatives for revenue. AVLA’s technical results has been complemented by an active investment strategy that generated good investment results in 2023.

AVLA’s balance sheet strength assessment is very strong given its solid capital base for the risks it undertakes, as reflected in its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The very strong balance sheet strength assessment also recognizes the company’s capital management capabilities and shareholders’ willingness and proven history of making capital contributions to support AVLA’s growth. A panel of reinsurers supports AVLA’s balance sheet strength level with excellent security. Limiting AVLA’s ratings is the potential pressure of the high financial leverage present in its ultimate parent company, AVLA Bermuda Holding Corp Ltd.

Negative rating actions could take place if the financial leverage at the holding company deteriorates or if there are capital outflows to AVLA’s holding company, AVLA Bermuda Corp Ltd., which weaken AVLA’s risk-adjusted capitalization to a level that no longer supports the current rating. Positive rating actions could take place if AVLA is able to maintain a stable upward trend in risk-adjusted capitalization, underpinned by positive bottom-line results. If the financial leverage at the holding company improves, it could potentially relieve the drag, prompting positive rating actions. Negative rating actions could occur if the perception of country risk by AM Best changes, negatively impacting the balance sheet strength of the company.

The methodology used in determining these ratings is Best’s Credit Rating Methodology (Version Jan. 18, 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

Key insurance criteria reports utilized:

· Understanding Global BCAR (Version March 7, 2024)

· Available Capital and Insurance Holding Company Analysis (Version Jan. 18, 2024)

· Rating Surety Companies (Version April 25, 2024)

· Scoring and Assessing Innovation (Feb. 27, 2023)

· Evaluating Country Risk (June 6, 2024)

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: April 12, 2023

· Initial Rating Date: Dec. 5, 2018

· Date Range of Financial Data Used: Dec. 31, 2018-Dec. 31, 2023

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. 

Mexico Peru Surety Latin America Press Release A.M. Best Rating Services, Inc. Best's Credit Rating Action

Latest News

More from Best’s News