AM Best Affirms AVLA Re’s Ratings
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 ratings agency said, “The outlook of these Credit Ratings is stable. The ratings reflect AVLA Re’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 [ERM].
“The stable outlooks reflect AM Best’s expectations that AVLA Re Ltd. will meet its business objectives in terms of operating metrics and capitalization, backed by the support from its group.
“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 March 2026, ABHC had equity of USD 110 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 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 business 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 1.2 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.
“Negative rating actions could occur if AVLA Re’s risk-adjusted capitalization deteriorates further due to significant capital base erosion, increased underwriting leverage 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.”
