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OCTOBER 30, 2020 01:07 PM (EDT)

AM Best Affirms Credit Ratings of UnipolRe Designated Activity Company


CONTACTS:
 Michael Dunckley, CFA
Associate Director, Analytics
+31 20 308 5422
michael.dunckley@ambest.com

Dr. Angela Yeo
Senior Director, Analytics
+31 20 308 5421
angela.yeo@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

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

FOR IMMEDIATE RELEASE

LONDON - OCTOBER 30, 2020 01:07 PM (EDT)
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of UnipolRe Designated Activity Company (UnipolRe) (Ireland). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect UnipolRe’s balance sheet strength, which AM 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 at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Risk adjusted capitalisation is supported by a low level of underwriting leverage and a conservatively invested asset portfolio. AM Best expects the company’s risk-adjusted capitalisation to remain at the strongest level over the medium term.

UnipolRe reported a loss of EUR 9.1 million in 2019 and had a combined ratio of 106.9%, as calculated by AM Best. The underwriting loss was driven by reserve strengthening associated with U.K. motor claims, as a result of the revision in the ‘Ogden’ discount rate for long-term bodily injuries to -0.25%, fixed for five years from July 2019. This was a market-wide event. Strong unrealised gains during 2019 meant that this weak underwriting result did not lead to capital erosion. During the first half of 2020, the company reported a profit of EUR 6.7 million. Prospectively, AM Best expects ongoing underwriting results to be profitable, helped by premium rate increases and lower expense ratios due to increased scale.

The company reported gross written premiums of EUR 264 million in 2019, representing 35% growth over 2019. The final year of a high-growth phase concluded in 2019 and premium growth is expected to stabilise in the future. Although there is some geographic diversification, the portfolio is concentrated by line of business, with motor third-party liability reinsurance representing around 70% of premiums in 2019.

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, UnipolSai Assicurazioni S.p.A., in the motor sector and its association with that brand enhances its business profile. The group operates predominantly within Italy, where it has leading positions in non-life and life insurance markets.

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

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.


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