AM Best Reaffirms Credit Ratings for AVLA Perú Compañía de Seguros S.A

AM Best has affirmed AVLA Perú Compañía de Seguros S.A.’s (AVLA) Financial Strength Rating of B++ (Good) and its Long-Term Issuer Credit Rating of “bbb” (Good), with both ratings maintaining a stable outlook. AVLA’s ratings reflect its very strong balance sheet strength, adequate operating performance, neutral business profile, and effective enterprise risk management.

The stable outlook indicates AM Best’s expectation that AVLA will continue to adapt profitably to market conditions while maintaining robust capitalization. Established in 2015, AVLA operates primarily in Peru’s property/casualty insurance sector, specializing in surety and credit insurance, recently expanding into property insurance in September 2023. It ranks among Peru’s top 10 non-life insurers and is a leading player in the surety segment.

AM Best views AVLA’s business profile as neutral, reflecting its significant role in Peru’s guarantee market and its strategic position in credit and surety insurance. The company has demonstrated effective underwriting and profitability since 2017, managing claims and enhancing revenue through strategic investments.

AVLA’s balance sheet strength is underscored by its solid capitalization and proactive capital management, supported by a panel of reinsurers providing excellent security. However, potential rating pressures include the high financial leverage of its parent company, AVLA Bermuda Holding Corp Ltd.

Negative rating actions could result from deteriorating financial leverage at the holding company or significant capital outflows affecting AVLA’s risk-adjusted capitalization. Conversely, positive rating actions could occur if AVLA maintains upward trends in capitalization and profitability, or if the financial leverage at the holding company improves. Changes in AM Best’s perception of country risk could also impact AVLA’s ratings negatively.

Overall, AVLA Perú Compañía de Seguros S.A. continues to demonstrate resilience and strategic management in navigating its operational landscape, supported by robust financial fundamentals and effective risk management practices.

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