AM Best Affirms Credit Ratings of AVLA Re Ltd.

Business Wire

5 days ago

MEXICO CITY--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of 'bbb+' (Good) of AVLA Re Ltd. (AVLA Re) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings of AVLA Re reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
AVLA Re is ultimately owned by AVLA Bermuda Holding Corp Ltd. (ABHC), a financial holding company domiciled in Bermuda that is engaged in insurance operations in Chile, Peru, Mexico, Brazil and the United States. As of May 2025, ABHC had equity of USD 89 million.
AVLA Re is considered a new company as it began operations in January 2022, under a Class 3A insurer license in Bermuda. The company currently reinsures business from other ABHC subsidiaries in Chile, Peru, Mexico and Brazil, and plans to reinsure premiums from third parties in the medium to long term. AVLA Re's business profile is considered limited, given the small size of the company and its high degree of competition.
The balance sheet strength of the company is considered very strong. AVLA Re has received two capital infusions from its holding company since its creation. AM Best will monitor any capital flows to and from the company to continue assessing the strength of its balance sheet.
The company's operating performance is considered adequate and in line with its position as a recently formed company. AVLA Re's premium growth has been prudent, with controlled increments in businesses from subsidiaries in the group. The company's claims experience has been in line with organization's expectations and AVLA Re was able to post positive bottom-line results of USD 5.8 million in its third year of operations. AM Best will continue to monitor the underwriting quality and operating metrics of this building block.
AVLA Re's ERM assessment is considered appropriate for its risk appetite and strongly supported by ABHC's back office. AVLA Re benefits from capital support from ABHC, as well as synergies and brand recognition from the group, with which AVLA Re shares experienced management.
The stable outlooks reflect AM Best's expectations that AVLA Re will meet its business objectives in terms of operating metrics and capitalization.
Negative rating actions could occur if AVLA Re's capital base erodes due to significant capital base deterioration or sustained unfavorable operating results. Negative rating actions could also occur should AVLA Re's importance to the group's strategy lessens in AM Best's opinion.
Positive rating actions could occur in the medium term, driven by a consistent, upward trend in operating results, which in turn, strengthens its capital base.
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 use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.