AM Best Affirms Ratings For Mozart Insurance
AM Best has affirmed the Financial Strength Rating of B++ [Good] and the Long-Term Issuer Credit Rating of “bbb” [Good] of Mozart Insurance, Ltd. [Mozart] [Bermuda]. The outlook of these Credit Ratings [ratings] is stable.
The ratings agency said, “The ratings reflect Mozart’s 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]. The stable outlooks reflect Mozart’s ability to report profitable results, allowing its capital base to strengthen over time, while its business strategy consolidates.
“Mozart was incorporated in Bermuda on July 12, 2019, and registered as a Class 3A insurer on Sept. 26, 2019. Mozart is owned by Newport International Limited, also incorporated and registered in Bermuda. Mozart assumes risks from Compañía Mundial De Seguros S.A. [Mundial], an insurance company based in Colombia, through retrocession agreements with Mundial’s reinsurers.
“Retrocession programs include proportional coverages under quota share arrangements provided to the auto line of business [third‐party liability and motor comprehensive insurance], lease tenant renting insurance for direct business on rent guarantees, leases of real estate spaces for residential and commercial buildings and personal accidents, which covers accidental death, disability and medical costs for drivers and occupants of public service vehicles. The scale of the operation, coupled with the geographic concentration in a single country, are factors that limit Mozart’s business profile.
“Mozart’s risk-adjusted capitalization stands at the strongest level, as measured by Best’s Capital Adequacy Ratio [BCAR]. Mozart’s capital base has been strengthened over the years through the reinvestment of earnings; however, dividend payments have limited its growth. The very strong assessment of Mozart’s balance sheet strength recognizes the company’s adequately matched obligations and risk appetite.
“The adequate assessment of Mozart’s operating performance reflects the company’s ability to generate profitable results within a short time after initiating operations. Mozart is susceptible to foreign exchange volatility due to the conversion of Colombian pesos, the currency in which all businesses are written, to U.S. dollars, the reporting currency of Mozart in Bermuda. As of year-end 2024, the company reported a positive bottom-line result of USD 12.4 million, driven by premium sufficiency along with investment income. Underwriting performance has been driven by well-contained acquisition expenses despite volatility in claims. AM Best considers Mozart’s ERM to be appropriate, as it is well-integrated into its operations; risk appetite and tolerance are well-defined.
“Positive rating actions could take place if Mozart strengthens its capital base over time while maintaining the strongest level of risk-adjusted capitalization through the consistent retaining of earnings. Additionally, positive rating actions could take place if Mozart maintains its solid trend in operating performance. Negative rating actions could occur if the company’s capital base erodes, driven by a deterioration in operating performance or significant cash withdrawals.”
