AM Best Places Credit Ratings of Austral Resseguradora S.A. and Austral Seguradora S.A. Under Review With Developing Implications

OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has placed under review with developing implications the
Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit
Ratings of “bbb+” of Austral Resseguradora S.A.(Austral Re) and Austral
Seguradora S.A.(Austral Seg). Both companies are domiciled in Brazil,
and collectively are referred to as Austral.

The rating actions follow the recent announcement that Austral Re and
Terra Brasis Resseguros have entered into a definitive agreement to
merge their reinsurance operations. The combined entity will be the
fifth-largest reinsurer based on estimated surplus (BRL 377 million, or
USD 97 million), and the third-largest reinsurer based on estimated
premiums (BRL 766 million, or USD 197 million annualized) in Brazil’s
reinsurance market, as of March 2019. The two companies have been in
discussion for a few months, likely in an attempt to create a stronger
reinsurance player in Brazil. The deal is expected to close within six
months, after regulatory (SUSEP) and anti-trust (CADE) approvals.

The shareholders of the proposed combined entity will be Vinci Partners,
Brasil Plural and the International Finance Corporation (IFC), the
financial arm of the World Bank. Bruno Freire, currently Austral Re’s
CEO, will be the CEO of the combined entity. Rodrigo Botti, which is
currently Terra Brasis’ CEO, will be the chief financial officer of the
combined entity.

The ratings will remain under review pending the completion of the
transaction. AM Best will continue to hold discussions with the
companies and monitor their risk-adjusted capitalization, operating
performance, business profile and enterprise risk management.

This press release relates to Credit Ratings that have been published
on AM 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 AM Best’s
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best’s Credit Ratings
. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view
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Guilherme (Guy) Monteiro Simoes
Senior Financial Analyst
908 439 2200, ext. 5301

[email protected]

Scott Mangan
Senior Financial Analyst
+1 908
439 2200, ext. 5593

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Christopher Sharkey
Manager, Public Relations
908 439 2200, ext. 5159

[email protected]

Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644

[email protected]

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