LONDON--()--A.M. Best Europe – Rating Services Limited has assigned a financial strength rating of A (Excellent) and an issuer credit rating of “a” to Talanx Reinsurance (Ireland) Ltd. (Talanx Re) (Ireland). The outlook assigned to both ratings is stable.
“Risk Management and the Rating Process for Insurance Companies”
The ratings of Talanx Re reflect its strong risk-adjusted capitalisation, good expected operating performance and the support the company receives from its parent company, Talanx AG.
Talanx Re is a reinsurance company fully owned by Talanx AG. The company has been operating since 2009, and its sole activity consists of the transaction of reinsurance business with the Talanx Primary Group. Talanx Re’s purpose is to optimize the group’s reinsurance structure and manage capital more efficiently. It is not expected to write third party business prospectively.
Talanx Re benefits from strong risk-adjusted capitalisation, with capital and surplus increasing by 18% to EUR 60.5 million at year-end 2011. The company’s premium income is expected to grow strongly in the next few years, from EUR 82.7 million in 2011 to EUR 250-275 million in 2014. This growth is expected to be supported by a capital increase of EUR 60 million at year-end 2012. Future capital levels are expected to be supported by solid retained earnings.
A.M. Best expects Talanx Re to post good financial results going forward in line with the overall group’s performance. The company reported a profit before tax of EUR 10.2 million in 2011 (2010: EUR 8 thousand), with the combined ratio decreasing to 95.9% (2010: 100.5%) as a result of improved development on the motor book.
There are currently no upwards or downwards pressures on Talanx Re’s ratings.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilised include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “Rating Members of Insurance Groups”; and “Catastrophe Analysis in A.M. Best Ratings”. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
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