A.M. Best Affirms Credit Ratings of AXA Mansard Insurance Plc

LONDON–(BUSINESS WIRE)–A.M. Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb-” of AXA Mansard Insurance Plc (AXA Mansard) (Nigeria), the majority-owned subsidiary of AXA S.A. (AXA). The outlook of these Credit Ratings (ratings) is positive.

The positive outlook of the Long-Term ICR reflects AXA Mansard’s consistently excellent underwriting performance, as demonstrated by the five-year average non-life combined ratio of 88%. Although AXA Mansard’s technical results have been impacted by inflationary pressure on expenses and claims in year-to-date 2016, A.M. Best expects the group’s underwriting earnings to remain strong, supported by the benefit of its solid competitive position as a top five composite insurer in Nigeria, wide and expanding distribution network, and effective risk management. However, some downside risk remains due to the weakening economic conditions of its domestic market.

The ratings also consider AXA Mansard’s strategic importance to AXA, through its access to the largest economy in Africa, where the company benefits from a solid competitive position, particularly within the market’s retail segment. Additionally, AXA Mansard continues to enhance its risk management capabilities through the alignment of its framework to that of its majority shareholder, and the group’s expertise and practices.

A.M. Best expects AXA Mansard’s risk-adjusted capitalisation to remain at a solid level, sustained by the higher retention of its earnings. In 2016, the company paid dividends equating to 12% of prior-year post-tax profits. This compared with a high of 92% over the past five years.

Historically, AXA Mansard’s balance sheet strength has been constrained by the high level investments in unlisted equities and property. However, over the years, management has made a concerted effort to reduce its exposure through its divestment of both asset classes. Based on unaudited accounts as at September 2016, AXA Mansard’s exposure to unlisted equities and property has stabilised to approximately 60% of the company’s capital and surplus base, compared with the highs of 83% in 2012.

This press release relates to Credit Ratings 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 see A.M. 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.

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