LONDON--(BUSINESS WIRE)--A.M. Best has upgraded the Long-Term Issuer Credit Ratings (Long-Term ICR) to “aa” from “aa-” and affirmed the Financial Strength Rating (FSR) of A+ (Superior) of Allianz SE (Allianz) (Germany) and most of its A.M. Best-rated subsidiaries. The outlook of the Long-Term ICR has been revised to stable from positive. The outlook of the FSR remains stable. [See below for a detailed listing of company Credit Ratings (ratings)].
The rating upgrades reflect Allianz’s strong financial performance, coupled with an excellent level of risk-adjusted capitalisation, despite adverse economic conditions in recent years. Furthermore, actions taken by the group in response to trends in the insurance industry, namely disruptive innovation and prolonged low interest rates, should support Allianz’s competitive position going forward.
Allianz’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), is excellent and is expected to remain at a similar level over the coming years, with strong earnings retention likely to offset the additional capital requirements stemming from business growth. Although exposure to market risk subjects the group’s solvency to potential volatility, significant capital buffers are in place to absorb market movements.
Allianz’s diversified earnings profile has supported a long track record of strong underwriting and overall results. With the exception of a small number of operating units where issues are actively being addressed, Allianz’s core operating units performed well in 2016. Profitable asset management operations enhance the group’s earnings profile, and concerns relating to fund outflows at PIMCO, Allianz’s largest individual asset manager, appear to have been addressed. Allianz is a leading global insurer with a strong competitive position in numerous mature insurance markets. Although a significant proportion of Allianz’s revenue is concentrated in Western Europe, no single market is considered critical for its overall earnings.
The Long-Term ICRs have been upgraded to “aa” from “aa-” and the FSR of A+ (Superior) has been affirmed for Allianz SE and its following subsidiaries:
- 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
- National Surety Corporation
- The American Insurance Company
- Associated Indemnity Corporation
- Chicago Insurance Company
- Fireman’s Fund Insurance Company
- Fireman’s Fund Indemnity Corporation
- Fireman’s Fund Insurance Company of Hawaii, Inc.
- Interstate Fire & Casualty Company
- Allianz Life Insurance Company of North America
- Allianz Life Insurance Company of New York
The FSR has been upgraded to A+ (Superior) from A (Excellent) and the Long-Term ICR has been upgraded to “aa” from “a” for Allianz Global Corporate & Specialty Resseguros Brasil S.A. (AGCS Re Brasil). The outlook of these ratings is stable. The rating upgrades are based on the full integration of AGCS Re Brasil into the AGCS group through common management, enterprise risk management, reinsurance and capital support.
The FSR of A+ (Superior) and the Long-Term ICR of “aa-” have been affirmed of Euler Hermes North America Insurance Company. The outlook of these ratings is stable.
The following Long-Term Issue Credit Ratings have been upgraded, and the outlook of the ratings has been revised to stable from positive:
Allianz Finance II B.V. (debt issues are guaranteed by Allianz
-- to “aa” from “aa-“ on EUR 750 million 3% senior unsecured bonds, due 2028
-- to “aa” from “aa-“ on GBP 750 million 4.5% senior unsecured bonds, due 2043
-- to “aa” from “aa-“ on EUR 500 million 1.375% senior unsecured bonds, due 2018
-- to “aa” from “aa-“ on EUR 1.5 billion 3.5% senior unsecured bonds, due 2022
-- to “aa” from “aa-“ on EUR 1.5 billion 4.75% senior unsecured bonds, due 2019
-- to “aa-” from “a+” on EUR 2 billion 5.75% subordinated bonds, due 2041
-- to “a+” from “a” on EUR 800 million 5.375% perpetual subordinated bonds
-- to “aa-” from “a+” on EUR 1.5 billion 5.625% subordinated bonds, due 2042
-- to “a+” from “a” on USD 1 billion 5.5% perpetual subordinated bonds
-- to “a+” from “a” on EUR 1.5 billion 4.75% perpetual subordinated bonds
-- to “a+” from “a” on CHF 500 million 3.25% perpetual subordinated bonds
-- to “a+” from “a” on EUR 1.5 billion 3.375% perpetual junior subordinated bonds
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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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