AMSTERDAM--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of UnipolRe Designated Activity Company (UnipolRe) (Ireland). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect UnipolRe’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
UnipolRe’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Following a EUR 100 million capital contribution from UnipolSai Assicurazioni S.p.A. (UnipolSai) during 2018 which increased paid-up capital to over EUR 300 million, AM Best expects the company’s risk-adjusted capitalisation to remain at the strongest level over the medium term.
UnipolRe reported a profit of EUR 4.7 million in 2018, with technical performance driven by a low level of losses from the company's property catastrophe excess of loss business. During the second half of 2019, UnipolRe undertook considerable reserve strengthening for motor business relating to personal injury discount rate in the United Kingdom. Prospectively, AM Best expects underwriting results to be profitable, helped by lower expense ratios as the company achieves scale.
The company reported gross written premiums of EUR 195 million in 2018, representing 94% growth over 2017, and growth is expected to slow to approximately 30% in 2019. Although there is some geographic diversification, the portfolio is concentrated by line of business, with motor third-party liability reinsurance representing 66% of premiums in 2018.
UnipolRe seeks to differentiate itself by developing close partnerships with its cedants and assisting them with product development and pricing. It benefits from the experience and expertise of its parent, UnipolSai, in the motor sector and its association with that brand enhances its business profile. The group operates predominantly within Italy, where it has leading positions in non-life and life insurance markets.
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