AMSTERDAM--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) 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) is stable.
The ratings reflect SIAT’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The ratings also consider, in the form of rating lift, AM Best’s expectation that UnipolSai will provide financial support to SIAT if needed.
SIAT’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), was at the strongest level at year-end 2020 and AM Best expects the BCAR to be maintained at least at the very strong level.
The company maintains a strong liquidity profile, with liquid investments accounting for approximately 126% of its year-end 2020 net technical liabilities. Offsetting factors in the balance sheet strength assessment include the company’s investment concentration in Italian government bonds and its dependence on reinsurance to write high-value risks.
SIAT has a track record of adequate underwriting performance with volatility contained by an effective reinsurance programme. In 2020, pre-tax profits increased to EUR 5.9 million from EUR 1.1 million in 2019 (adjusted by AM Best for extraordinary income and expenses), due an improvement in SIAT’s underwriting performance, particularly in its hull line of business. AM Best expects SIAT to achieve a return-on-equity ratio in the high single digits in 2021, supported by selective underwriting and further pricing improvements for marine insurance lines.
SIAT has an established reputation as a niche insurer in the marine hull and cargo segments, in which it ranks among the leading players in Italy. In addition, the company’s business profile is strengthened by its reciprocal outsourcing agreements with UnipolSai, a large Italian insurer. SIAT benefits from a developed ERM framework, with the risk function centralised at the group level.
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