A.M. Best Assigns Ratings to Compagnie Belge d'Assurances Aviation S.A. (Aviabel)

LONDON--(BUSINESS WIRE)-- A.M. Best has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of “a-” to Compagnie Belge d'Assurances Aviation S.A. (Aviabel) (Belgium). The outlook assigned to both ratings is stable.

Aviabel has an excellent level of risk-adjusted capitalisation, boosted by strong operating profits in recent years. Whilst acknowledging that large claims or substantial investment losses could have a significant impact on future operating performance, A.M. Best expects risk-adjusted capitalisation to remain supportive of the ratings.

Aviabel has a strong underwriting record with a 5-year (2010-2014) average combined ratio likely to be around 90%, in spite of higher expense ratios in more recent years. The higher expense ratios reflect increased staffing costs, mainly to meet the demands of Solvency II, set against a reduced level of net written premiums in challenging market conditions. Although overcapacity and generally good loss experience continue to drive down aviation premium rates, Aviabel is expected to report a good profit for 2014, on a similar scale to recent years. The technical profit is likely to have been supported by an excellent level of investment income.

Aviabel has a strong business profile as the leading aviation underwriter in the Benelux countries, with approximately 80% of the general aviation market, although business from these local markets accounted for only 22% of gross premiums in 2013. Aviabel’s target markets of France, Spain, Portugal, Turkey and leading lines in U.K. general aviation contributed a further 21%, while the balance of 57% was derived from worldwide markets.

If Aviabel continues to manage its business successfully through the current particularly challenging phase of the global aviation insurance cycle, there could be positive pressure on the ratings in the medium term. However, unexpectedly poor operating results or a material decrease in Aviabel’s risk-adjusted capitalisation could put negative pressure on the rating.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilised:

• Catastrophe Analysis in A.M. Best Ratings
• Risk Management and the Rating Process for Insurance Companies
• Understanding Universal BCAR

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best
David Drummond, +(44) 20 7397 0327
Senior Financial Analyst
[email protected]
or
Catherine Thomas, +(44) 20 7397 0281
Director, Analytics
[email protected]
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best

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