AM Best Affirms Credit Ratings of AXA Mansard Insurance Plc

AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of AXA Mansard Insurance Plc (AXA Mansard) (Nigeria). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect AXA Mansard’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also reflect rating enhancement from AXA Mansard’s ultimate parent, AXA S.A.

AXA Mansard’s balance sheet strength is underpinned by its risk-adjusted capitalisation that is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Capital consumption is influenced significantly by the company’s real estate holdings, which in 2021, equated to a little under half of capital and surplus. The company’s BCAR scores declined in 2021, although remained at the strongest level. The deterioration was due largely to significant unrealised losses on fixed income investments, as well as the payment of an NGN 2.0 billion (USD 4.8 million) dividend. The balance sheet strength assessment also considers AXA Mansard’s high reinsurance dependence, driven by large cessions on energy and property risks, as well as its exposure to the high levels of economic, political and financial system risks that are associated with operating in Nigeria.

AXA Mansard’s underwriting performance has improved steadily over recent years, with its combined ratio reducing to 89% in 2020 from 113% in 2016. Historically, technical performance was impacted negatively by the company’s high expense ratio, which exceeded 44% in the years 2015-2017; however, the ratio fell to a low of 21% in 2020 as the company’s health business line matured. For the year ended 2021, AXA Mansard reported solid unaudited results, with a pre-tax profit of NGN 5.6 billion (USD 13.5 million), a modest NGN 0.4 billion (USD 1.0 million) decline against 2020.

AXA Mansard is a composite insurer concentrated in Nigeria’s insurance market. The company has a solid foothold in its domestic market where it ranks among the leading companies in the non-life segment, enjoying a market leading position in the health line of business. With good long-term growth prospects, the company is expected to embed its position further in the health segment over the coming years.

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 Guide to Best’s Credit Ratings. 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 specialising 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. For more information, visit www.ambest.com.

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Ben Diaz-Clegg
Financial Analyst
+44 20 7397 0293
ben.diaz-clegg@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Tim Prince
Director, Analytics
+44 20 7397 0320
timothy.prince@ambest.com

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com