AM Best Revises Outlooks to Negative for AXA Mansard Insurance Plc

AM Best has revised the outlooks to negative from stable and 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 Credit Ratings (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.

The revision of the outlooks to negative reflects the potential for downward pressure arising from high inflation and depreciation of the local currency in Nigeria.

Based on the company’s year-end 2024 results, AXA Mansard’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), declined to the strong level from the very strong level at year-end 2023. This follows a series of Nigerian naira devaluations throughout 2023 and 2024, which materially increased the company’s asset risk and concentration within its investment portfolio. While macroeconomic indicators have somewhat stabilised in first-quarter 2025, economic conditions remain uncertain, which could place further pressure on the company’s balance sheet strength fundamentals.

AXA Mansard has a track record of adequate operating performance, with it generating a robust return on equity (ROE) ratio of 32% in 2023, and 55% in 2024. ROEs should be viewed in the context of high inflation in Nigeria, which trended in excess of 30% during 2024. In recent years, overall earnings have materially benefitted from foreign exchange gains associated with AXA Mansard’s surplus of foreign-currency denominated investments amid the sharp Nigerian naira devaluations. Underwriting performance has been modest, with non-life combined ratios typically trending close to break-even in recent years, leaving the company somewhat reliant on investment income and other non-technical earnings.

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.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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