Best’s News & Research Service - October 28, 2016 11:02 AM (EDT)
A.M. Best Upgrades Credit Ratings of Zavarovalnica Triglav d.d. and Pozavarovalnica Triglav Re d.d. Ljubljana
- October 28, 2016 11:02 AM (EDT)
London //BestWire// - A.M. Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “a” from “a-” for Zavarovalnica Triglav d.d. (Triglav), the operating holding company of the Triglav group, and Pozavarovalnica Triglav Re d.d. Ljubljana (Triglav Re). The outlook of the Credit Ratings (ratings) of Triglav has been revised to stable from positive, whilst the outlook of the ratings of Triglav Re remains stable. Both companies are domiciled in Slovenia.
The rating upgrades for Triglav reflect the group’s consistently excellent technical performance over the past five years, as demonstrated by the average combined ratio of 89.2% (2011-2015). Triglav’s strong underwriting results follow a change in strategy in 2010 to focus on profitability, through quality risk selection and underwriting discipline. For the first half of 2016, Triglav group’s combined ratio was stable at 93%, despite being affected by a higher level of weather-related losses than the same period in the previous year. A.M. Best expects Triglav’s technical earnings to remain strong, as a dominant competitive position in the domestic market and strong brand recognition across Southeast Europe continue to support selective risk underwriting. Furthermore, A.M. Best expects further improvements to the group’s risk management framework to support its earnings and protect its balance sheet strength.
The rating actions also reflect Triglav’s strong consolidated risk-adjusted capitalisation, which has been sustained by retained earnings. A.M. Best expects Triglav to maintain a prudent capital management and dividend policy to support capital adequacy going forward.
A negative rating factor is the weak technical performance of Triglav’s operations in the West Balkan region, which has been affected by intense competitive conditions and high costs of operating in these markets. Nonetheless, Triglav continues to demonstrate modest improvement in earnings derived from these operations, as the group achieves additional scale and actively seeks alternative lower cost distribution channels.
The ratings of Triglav Re reflect its importance to the group’s strategy as the licensed reinsurer of the group. In addition to business derived from the global reinsurance market, which accounted for approximately 5% of Triglav’s consolidated gross written premium of EUR 919 million in 2015, Triglav Re provides reinsurance capacity to all group companies.
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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.