AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of AXA Mansard Insurance Plc (AXA Mansard) (Nigeria). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect AXA Mansard’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also reflect rating enhancement, in the form of lift, from AXA Mansard’s ultimate parent, AXA S.A. (France).

AXA Mansard’s balance sheet strength is underpinned by risk-adjusted capitalisation, which is expected to remain at least at the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR). Capital consumption is primarily driven by asset risk, which incorporates the company’s substantial real estate investments. With its business concentrated domestically, AXA Mansard is exposed to the very high levels of economic, political and financial system risks in Nigeria. The balance sheet strength assessment also considers AXA Mansard’s high reinsurance dependence on large energy and property risks; however, this is partially mitigated by a reinsurance panel of excellent credit quality.

AXA Mansard has a track record of robust, albeit volatile, non-life underwriting performance, demonstrated by a five-year (2018-2022) weighted average combined ratio of 97.4%. For the year-ended 2023, AXA Mansard reported solid unaudited results, evidenced by a return on equity (ROE) of 36.2%, comparing favourably against the five-year weighted average ROE of 10.3%. The improvement was driven by substantial foreign exchange gains relating to AXA Mansard’s U.S. dollar denominated investments amid the sharp devaluation of the Nigerian naira during 2023. Prospective performance is expected to be supported by actions taken to improve the profitability of the health portfolio, as well as positive contributions from the company’s life book.

AXA Mansard is a composite insurer, writing a diverse book of business that is concentrated in Nigeria. The company has a solid foothold in its domestic market where it ranks among the largest non-life companies and enjoys a leading market position in the health segment. With good long-term growth prospects, AXA Mansard is expected to further strengthen its competitive position over the coming years.

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