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SEPTEMBER 03, 2021 10:09 AM (EDT)

AM Best Affirms Credit Ratings of Solunion Seguros, Compañía Internacional de Seguros y Reaseguros S.A.


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 Giannina Carbajal Ortiz
Financial Analyst
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giannina.carbajal@ambest.com

Mathilde Jakobsen
Director, Analytics
+31 20 308 5423
mathilde.jakobsen@ambest.com

Christopher Sharkey
Manager, Public Relations
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Jim Peavy
Director, Communications
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FOR IMMEDIATE RELEASE

AMSTERDAM - SEPTEMBER 03, 2021 10:09 AM (EDT)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Solunion Seguros, Compañía Internacional de Seguros y Reaseguros S.A. (Solunion) (Spain). The outlook of these Credit Ratings (ratings) is stable.

Solunion is the operating holding company of the Solunion group of companies, a 50-50 joint venture between MAPFRE Participaciones, S.A.U., a wholly owned subsidiary of MAPFRE S.A. (MAPFRE), and Euler Hermes Luxembourg Holding S.à.r.l., a subsidiary of Euler Hermes Group S.A. (Euler Hermes). Allianz SE is the ultimate parent of Euler Hermes.

The ratings reflect Solunion’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also consider the strategic and operational support Solunion receives from its joint shareholders, including significant reinsurance support in the form of quota-share arrangements and excess of loss protection.

Solunion’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which remained at the strongest level as at year-end 2020, as measured by Best’s Capital Adequacy Ratio (BCAR). The balance sheet strength assessment is supported further by Solunion’s prudent reserving approach and conservative investment strategy. Solunion is highly dependent on reinsurance, but the associated risk is considered limited, as reinsurance arrangements are solely with the company’s shareholders.

Solunion has been consistently profitable over the recent years, reporting a five-year weighted average combined ratio of 89.5% and return on equity of 6.4% (2016-2020). As at June 2021, results were positive and in line with the budget, despite the ongoing challenging economic environment. An offsetting factor is the uncertainty around the sustainability of the trade credit results in light of the economic consequences of the COVID-19 pandemic in the markets where the company operates. However, AM Best note the company’s ability to take prompt risk-mitigating actions on non-performing business when required.

Solunion is a relatively small, albeit growing, credit insurer, reporting gross written premium of EUR 211 million in 2020, with a product offering limited to trade credit and surety lines of business. The company’s market profile is concentrated in Spain, with some geographical diversification as a result of business underwritten in Latin America. Positive business profile factors include the company’s ability to leverage the trade credit expertise and capabilities of Euler Hermes, whilst accessing MAPFRE’s widespread and well-established distribution channels in its target 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 use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.


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