AM Best Places Credit Ratings of Terra Brasis Resseguros 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
Rating of “bbb” of Terra Brasis Resseguros (Terra Brasis) (Brazil).

The rating actions follow the recent announcement that Austral
Resseguradora S.A. (Austral Re) and Terra Brasis 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 both
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
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best’s Credit Ratings
. 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. Visit
www.ambest.com
for more information
.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

Guilherme (Guy) Monteiro Simoes
Senior Financial Analyst
+1
908 439 2200, ext. 5301

[email protected]

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

[email protected]

Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159

[email protected]

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

[email protected]

AM Best Places Credit Ratings of Terra Brasis Resseguros 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
Rating of “bbb” of Terra Brasis Resseguros (Terra Brasis) (Brazil).

The rating actions follow the recent announcement that Austral
Resseguradora S.A. (Austral Re) and Terra Brasis 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 both
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
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best’s Credit Ratings
. 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. Visit
www.ambest.com
for more information
.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

Guilherme (Guy) Monteiro Simoes
Senior Financial Analyst
+1
908 439 2200, ext. 5301

[email protected]

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

[email protected]

Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159

[email protected]

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

[email protected]

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