Best’s News & Research Service - September 05, 2019 11:26 AM (EDT)
AM Best Affirms Credit Ratings of Allianz SE and Rated Subsidiaries
- September 05, 2019 11:26 AM (EDT)
Amsterdam //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” of Allianz SE (Allianz) (Germany) and its rated subsidiaries (see below for the list of the companies). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Allianz’s balance sheet strength, which AM Best categorises as strongest, as well as its strong operating performance, very favourable business profile and very strong enterprise risk management.
Allianz is one of the world’s largest insurance groups, with superior diversification by geography and business line, and leading positions in many developed and emerging markets, offering a complete range of life and non-life insurance products, as well as asset management services. Its competitive position is supported by its scale, strong management capabilities, dynamic strategy and strong brand.
AM Best expects Allianz’s consolidated risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), to be maintained at the strongest level, underpinned by a prudent capital management approach. Financial leverage and coverage ratios are supportive of the balance sheet strength assessment and financial flexibility is considered excellent due to the group’s good access to capital markets.
Allianz has a track record of strong and stable operating performance, supported by its diversified earnings profile. The group has produced a five-year weighted average return on equity of 10.8% (2014-2018) (as calculated by AM Best). The property/casualty segment has demonstrated consistently strong performance, reporting a five-year average combined ratio of 94.5%, supported by strong group-wide pricing capabilities. The life/health segment’s operating profit has seen five-year compound annual growth of 9.3%, reaching EUR 4.2 billion in 2018 despite a declining investment margin driven by the low interest rate environment. The group’s profitable and scalable asset management business continues to provide a good additional source of income (22% of the group’s operating profit in 2018). Prospective earnings are expected to remain strong over the medium term.
The FSR of A+ (Superior) and the Long-Term ICR of “aa” have been affirmed with stable outlooks for the following subsidiaries of Allianz SE:
- Allianz Global Corporate & Specialty Resseguros Brasil S.A.
- Allianz Global Corporate & Specialty SE
- Allianz S.p.A
- Allianz Risk Transfer AG
- Allianz Risk Transfer (Bermuda) Limited
- AWP P&C S.A.
- Jefferson Insurance Company
- AWP Health & Life S.A.
- Allianz Global Risks US Insurance Company
- Allianz Underwriters Insurance Company
- AGCS Marine Insurance Company
- American Automobile Insurance Company
- Euler Hermes North America Insurance Company
- National Surety Corporation
- The American Insurance Company
- Associated Indemnity Corporation
- Chicago Insurance Company
- Fireman’s Fund Insurance Company
- Fireman’s Fund Indemnity Corporation
- Interstate Fire & Casualty Company
- Allianz Life Insurance Company of North America
- Allianz Life Insurance Company of New York
The following Long-Term IRs have been affirmed with stable outlooks:
Allianz Finance II B.V. (debt issues are guaranteed by Allianz SE)—
— “aa-” on EUR 2 billion 5.75% subordinated bonds, due 2041
— “a+” on EUR 800 million 5.375% perpetual subordinated bonds
— “aa” on EUR 750 million 3% senior unsecured bonds, due 2028
— “aa” on GBP 750 million 4.5% senior unsecured bonds, due 2043
— “aa” on EUR 1.5 billion 3.5% senior unsecured bonds, due 2022
Allianz SE—
— “a+” on EUR 1.5 billion 4.75% perpetual subordinated bonds
— “a+” on CHF 500 million 3.25% perpetual subordinated bonds
— “a+” on USD 1 billion 5.5% perpetual subordinated bonds
— “aa-” on EUR 1.5 billion 5.625% subordinated bonds, due 2042
— “a+” on EUR 1.5 billion 3.375 perpetual junior subordinated bonds
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 Understanding 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 rating agency and information provider with a unique focus on the insurance industry.