AM Best revises outlooks to stable for AXA Mansard Insurance Plc

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Chuks Udo Okonta

AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of AXA Mansard Insurance Plc (AXA Mansard) (Nigeria).
The ratings reflect AXA Mansard’s balance sheet strength, which AM Best categorises as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also reflect rating enhancement from the AXA group.

The revision in outlooks to stable reflects AM Best’s expectation that AXA Mansard’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), will remain at the strongest level over the medium term, benefiting from the de-risking of its investment portfolio, and that the company’s underwriting performance will gradually improve.

AXA Mansard’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by BCAR. Capital consumption is significantly influenced by the company’s real estate holdings, which in 2018 equated to 73% of its capital and surplus. However, AM Best expects that AXA Mansard will significantly reduce its allocation to real estate over the medium term, which would have a positive impact on its future BCAR. The balance sheet strength assessment also considers AXA Mansard’s exposure to the high levels of economic, political and financial system risks that are associated with operating in Nigeria.

AXA Mansard’s overall operating performance has been driven by its investment results in recent years, and the company’s five-year (2014-2018) weighted average return on equity of 10% should be viewed in light of inflation in Nigeria, which has ranged between 8% and 17% over the same period. Underwriting performance has been modest, with the company reporting a five-year average non-life combined ratio of 107%, impacted by its high but declining expense ratio, which fell to 39% in 2018 from 54% in 2014. Although a rapidly growing health insurance portfolio is negatively impacting the company’s loss ratio, it has been profitable for the company due to its low expense ratio. Over the medium term, AM Best expects growth of the health book of business to improve the company’s technical results.

AXA Mansard is a composite insurer concentrated in the Nigerian market. The company has an aggressive growth strategy within the health insurance line, which in 2018 led to it becoming a market leader in this segment. With support from the AXA group, the company continues to take positive steps to improve and embed risk management throughout its operations, and AM Best expects the company to continue to evolve its risk management capabilities.

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 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 credit rating agency, news publisher and data provider specialising in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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