LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of SIAT-Società Italiana Assicurazioni e Riassicurazioni p.A. (SIAT) (Italy), a subsidiary of UnipolSai Assicurazioni S.p.A. (UnipolSai). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect SIAT’s balance sheet strength, which A.M. Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
SIAT’s balance sheet strength assessment is underpinned by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). Capital adequacy is expected to benefit from a moderate level of internal capital generation in prospective years. The company maintains a good liquidity profile, with liquid investments accounting for approximately 130% of its year-end 2017 net technical liabilities. Partially offsetting factors include the company’s investment concentration in Italian government bonds and dependence on reinsurance to write large-value risks.
SIAT has a long track record of underwriting profits, with combined ratios of below 90% reported in each of the past three years (2015-2017). In 2017, the company’s pre-tax profits decreased by 18% from the prior year to EUR 7.2 million, due to a slight deterioration in its claims experience and lower investment earnings. Going forward, A.M. Best expects SIAT to achieve a return on equity in the high-single digits.
SIAT has an established reputation as a niche insurer in the marine hull and cargo segments, where it ranks among the leading players in Italy. In addition, the company’s business profile is strengthened by its association with UnipolSai, a large Italian insurer. SIAT benefits from a developed ERM framework, with the risk function being centralised at the group level.
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