Press Release - SEPTEMBER 21, 2018

A.M. Best Affirms Credit Ratings of UnipolRe Designated Activity Company


CONTACTS:
 Michael Dunckley, CFA
Associate Director
+44 20 7397 6264
michael.dunckley@ambest.com

Catherine Thomas, CFA
Senior Director, Analytics
+44 20 7397 6264
catherine.thomas@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

LONDON - SEPTEMBER 21, 2018
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of UnipolRe Designated Activity Company (UnipolRe) (Ireland). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect UnipolRe’s balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

UnipolRe’s balance sheet strength is underpinned by risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which is consistent with the strongest assessment. A.M. Best expects the company’s risk-adjusted capitalisation to remain at the strongest level over the medium term, with an additional capital contribution in 2018 from UnipolSai Assicurazioni S.p.A. (UnipolSai) supporting rapid expansion in line with the company’s business strategy.

UnipolRe performed well in its first two years of operation as a third-party reinsurer. However, in 2017 the company reported a EUR 9.0 million loss as the change in the personal injury discount rate in the United Kingdom led to a one-off increase in reserves for motor business. Underwriting results are expected to be profitable in 2018 and maintained at an adequate level, helped by lower expense ratios as the company achieves scale. Nonetheless, persisting competitive market conditions represent a key headwind to UnipolRe’s profitable growth plans.

The company reported gross written premiums of EUR 101 million in 2017, representing 79% growth over 2016, and business volumes are expected to increase significantly in 2018. Although there is some geographic diversification, the portfolio is concentrated by line of business, with motor third-party liability reinsurance representing 62% of premiums in 2017.

UnipolRe seeks to differentiate itself by developing close partnerships with its cedants and assisting them with product development and pricing. It benefits from the experience and expertise of its parent in the motor sector and its association with the UnipolSai brand enhances its business profile. The group operates predominantly within Italy and is well-known throughout Western Europe, reflecting its leading positions in Italy’s non-life and life insurance markets.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.


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