OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Ratings of “a-” of Junto
Resseguros S.A. (Junto Re) and Junto Seguros S.A. (Junto Seg)
(collectively referred to as Junto). The outlook of these Credit Ratings
(ratings) is stable. Both companies are domiciled in Brazil.
The ratings reflect Junto’s balance sheet strength, which AM Best
categorizes as strongest, as well as its adequate operating performance,
neutral business profile and appropriate enterprise risk management
(ERM).
Junto Re is classified as a local reinsurer in Brazil and mainly
operates as a captive reinsurer for Junto Seg, an organization that has
been writing surety directly for more than 20 years. Junto Seg is the
market-facing entity and a leading surety writer in Brazil. Junto
benefits operationally from its minority shareholder, The Travelers
Companies, Inc. (ownership is 49.5%). These benefits include
collaboration on ERM, employee development, retrocession placement,
claims handling, business development and other operational functions.
Junto maintains low underwriting leverage and strong liquidity metrics,
with a comprehensive retrocession program that provides additional
capacity and reduces the company’s overall exposure.
Partially offsetting these positive rating factors is Junto’s
concentration risk as essentially a mono-line surety writer with
business concentration in a single country. Junto’s future plans to
mitigate this risk include expansion into related lines of business and
geographic diversification into other parts of Latin America.
Additionally, Brazil’s (re)insurance market continues to be highly
competitive, with homegrown and global (re)insurers vying for market
share. With Brazil’s economy showing mixed signs while awaiting growth
to resume, companies are seeking international expansion while keeping
an eye on growth opportunities in the domestic insurance market. Surety
remains as one of the fastest-growing segments in the (re)insurance
industry in Brazil.
Positive rating triggers include a successful long-term execution of the
group’s growth and diversification strategy, a consistent operating
performance, along with maintaining robust risk-adjusted capitalization.
Negative rating triggers include a deterioration in either operating
results or risk-adjusted capitalization, the inability to execute its
growth and diversification strategy, a continued weakness in Brazil’s
economy or a downgrade in Brazil’s country risk tier.
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
Associate Director
+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]
