A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit rating (ICR) of “a” of AXA Insurance Company (New York, NY). Additionally, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a+” of AXA Art Insurance Corporation (AXA Art) (New York, NY).
Concurrently, A.M. Best has affirmed the FSR of B++ (Good) and ICR of “bbb” of Coliseum Reinsurance Company (Coliseum Re) and AXA Corporate Solutions Life Reinsurance (ACSLRe). A.M. Best also has withdrawn the FSR of B++ (Good) and ICR of “bbb” of Mosaic Insurance Company (Mosaic). These are U.S. subsidiaries of AXA S.A. (AXA) (France) (Other OTC: AXAHY) that are in run off. The outlook for all ratings is stable. All companies are domiciled in Wilmington, DE, unless otherwise specified.
The ratings of AXA Insurance Company reflect its strong risk-adjusted capitalization, which is supported by an extensive reinsurance program, its favorable liquidity and strategic importance to AXA. The company serves as AXA’s primary domestic insurer of reverse flow business, representing the U.S. portion of multinational accounts generated primarily by the clients of AXA Corporate Solutions Assurance and AXA Versicherung AG. AXA Insurance Company also provides 60% quota share reinsurance coverage for AXA Art to better utilize its capital.
Acting essentially in a fronting role, most business is reinsured to AXA Insurance Company’s affiliates through quota share reinsurance agreements. While heavy reliance on affiliated reinsurance leads to high ceded underwriting leverage, the company’s outstanding reinsurance recoverables are predominantly collateralized. AXA Insurance Company also benefits from the financial flexibility of AXA. While the company’s net operating performance has exhibited volatility historically, A.M. Best expects this performance to continue improving over the long term based on AXA Insurance Company’s present and clearer strategy, along with its continued reinsurance protection. In recent years, the company has taken actions to cleanse its balance sheet, including write-offs of old reinsurance recoverables. These actions should continue to lead to better results going forward that are more reflective of AXA Insurance Company’s remaining core book of business, which has been performing favorably.
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