AM Best raises ratings for Junto Re and Junto Seg, sets stable outlook

Credit rating agency AM Best has raised the Financial Strength Rating of Junto Resseguros S.A. (Junto Re) and Junto Seguros S.A. (Junto Seg) to A (Excellent) from A- (Excellent).

The Long-Term Issuer Credit Ratings were also lifted to “a” (Excellent) from “a-” (Excellent). Both firms, headquartered in Brazil and collectively known as Junto, now carry a stable outlook, revised from the previous positive designation.

AM Best attributes these ratings to Junto’s strong balance sheet, reliable operating performance, steady business profile and enterprise risk management structure.

The upgrade, according to AM Best, is supported by many years of consistent earnings and stable underwriting indicators, underpinned by a solid capital foundation. The new stable outlook is based on the expectation that Junto will continue producing favourable results, growing surplus and supporting its expanding portfolio, while remaining backed by The Travelers Companies, Inc.

Junto Re operates as a local reinsurer in Brazil and primarily reinsures Junto Seg, which has written surety for more than twenty years. Junto Seg is the group’s direct market entity and a leading provider of surety in Brazil.

AM Best highlights that both companies gain significant operational advantages through their minority shareholder, Travelers Brazil Acquisition LLC (49.5% ownership), ultimately owned by The Travelers Companies, Inc. These advantages include joint work on risk management, staff training, retrocession strategy, claims processes and general operational support.

After returning excess capital to shareholders, Junto still maintains low leverage, strong liquidity and a diverse retrocession program that enhances capacity and reduces exposure. AM Best notes that the group is in a favourable position to pursue growth in areas such as performance bonds.

AM Best also points out that Junto’s concentration in surety and exclusive exposure to one national market creates sensitivity to regulatory changes, even if such changes are not anticipated. To address this, the group is working to expand into related business lines within one of Latin America’s largest insurance markets, supported by updated distribution approaches.

AM Best states that Junto’s operating performance has shown clear and consistent improvement over the past five years, supported by robust technical and non-technical performance and capital strength at the highest levels. Elevated interest rates in Brazil have further contributed to investment income and stronger returns.

Brazil’s surety sector remains highly competitive, with domestic and international re/insurers competing for position. Economic uncertainty continues to influence market dynamics, prompting many companies to explore international opportunities while remaining alert to openings within the local market. Surety continues to grow at a rapid pace within the country’s insurance landscape.

According to AM Best, potential downward rating pressure could arise if Brazil’s economic conditions weaken and affect Junto’s results, or if changing market conditions limit its ability to execute its strategy. While not expected soon, upward rating movement could occur if Junto further enhances its business profile and maintains a clear, sustained leadership position in its segment.