Moody's on April 3 affirmed ACE Seguros SA's Ba3 global local currency and Aaa.ar national scale insurance financial strength ratings, while withdrawing Chubb Argentina de Seguros SA's Ba3 global local currency and Aaa.ar national scale insurance financial strength ratings.
The ratings actions follow regulatory approval of the merger of the subsidiaries of ACE and Chubb in Argentina, whereby Chubb Argentina de Seguros was absorbed by ACE Seguros, which was then renamed Chubb Seguros Argentina SA.
The affirmation of ACE Seguros reflects the stronger credit profile for the newly combined entity as well as the increased benefit of parental support, Moody's said.
"The stronger credit profile of the combined operation is evidenced by greater product diversification, strengthened capitalization and improved asset quality," the rating agency noted. It added that synergies from the merger will probably result in cost reductions and higher efficiency, which will have a positive impact on the firm's profitability.
The ratings on ACE Seguros also reflect the company's commercial strategy of maintaining multiple distribution channels, its good market position in some property segments, its well-diversified business book, and its ultimate parent's solid financial profile.