LONDON--(BUSINESS WIRE)--A.M. Best has upgraded the issuer credit rating to “a+” from “a” and affirmed the financial strength rating of A (Excellent) of Talanx Reinsurance (Ireland) Ltd. (Talanx Re) (Ireland). Talanx Re is a wholly owned subsidiary of Talanx AG, the intermediate non-operating holding company of the Talanx group (together known as Talanx). The outlook for both ratings is stable.
The rating actions reflect the increasing significance of Talanx Re in Talanx’s capital management strategy, as the group’s internal reinsurer. The company is fully integrated within Talanx and has benefited from explicit parental support in the form of several capital contributions and a debt issuance since inception. The ratings also consider the company’s deteriorating risk-adjusted capitalisation and positive operating performance.
A.M. Best expects Talanx Re’s risk-adjusted capitalisation to deteriorate to a marginal level in 2015, as the company assumes greater premium volumes from group affiliates, thereby increasing its underwriting risk exposure. The company’s shift in business mix toward natural catastrophe risks and non-proportional business increases the potential for volatility in Talanx Re’s level of risk-adjusted capitalisation. However, A.M. Best believes that Talanx Re’s development will continue to be supported by its parent.
Talanx Re’s operating performance is expected to remain positive, underpinned by a relatively stable income stream from investments and overall sound, albeit fluctuating, technical earnings. In A.M. Best’s opinion, Talanx Re’s operating results will continue to benefit from the strong risk management framework implemented throughout the Talanx group of companies.
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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