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Allianz Global Corporate & Specialty confirmed A+ (stable outlook) by A.M. Best

  • A.M. Best confirms A+ ("Superior") financial strength rating on December 22 for Allianz Global Corporate & Specialty (AGCS)
  • AGCS issuer credit rating “aa” also confirmed
  • Allianz Risk Transfer AG receives its first A.M. Best financial strength rating of A ("Excellent")
  • Outlook for all ratings stable
  • Download news briefing here

The rating applies to Allianz Global Corporate & Specialty AG (AGCS AG) and Allianz Global Corporate & Specialty (France) (AGCS France). The same ratings for the United States AGCS entities Allianz Global Risks U.S. Insurance Co. (AGR US), AGCS Marine Insurance Company (AMIC) and Allianz Underwriting Insurance (AUI) were announced separately today. A.M. Best has also assigned a financial strength rating of A (Excellent) and an issuer credit rating of “a+” to AGCS AG’s subsidiary, Allianz Risk Transfer AG (Switzerland), the primary entity of the Allianz Risk Transfer (ART) group. The outlook for all ratings is stable.

AGCS has therefore maintained its position as one of the highest-rated insurers in its sector. A.M. Best named several factors that led to this decision:

“The ratings reflect A.M. Best’s view that AGCS AG and AGCS France are an integral part of the strategy of their ultimate parent company, Allianz Societas Europaea (Germany) (Allianz SE). Taken together, the AGCS companies in Germany, France and the United States contribute a significant proportion of Allianz SE’s consolidated non-life gross premium written.” 

“Stand-alone risk-adjusted capitalization is strong, benefiting from improvement as a result of Allianz SE’s re-structuring of its global corporate and specialty business. AGCS AG has emerged from the re-structuring as Allianz SE’s principal carrier for this business, having successfully integrated portfolios and business units from elsewhere in the group.” 

“AGCS AG allocated EUR 160 million to equalization reserves in 2009, which A.M. Best credits to capital. Risk-adjusted capitalization is also supported by AGCS AG’s conservative investment allocation and extensive use of excess of loss reinsurance protection placed with Allianz SE companies and with third party reinsurers.”

“Additionally, the ratings of AGCS AG reflect its consistent strong performance, which A.M. Best believes will continue in 2010.”

“Although A.M. Best anticipates significant growth for the AGCS companies, underwriting profitability is expected to be maintained because part of the growth will arise from transferred business. The companies will also be able to leverage cross-selling opportunities within Allianz SE and commodity property business will form a smaller part of the overall account written.”

“In 2009, AGCS AG maintained its low combined ratio at 84%, supported by substantial prior year reserve releases. Investment income has been affected by the lower yield environment but in 2009 realized and unrealized capital gains enabled the company to maintain its overall investment income at a comparable level to the previous year at EUR 176 million.”

“Further expansion is expected as more large accounts are transferred and due to growth in emerging markets, particularly Brazil and Asia. Certain business lines are also likely to provide medium-term growth opportunities, including marine, energy, financial lines and product and environmental liability.”

“A.M. Best anticipates strong growth in the volume of business written by the AGCS companies and a continuing strong profile for the companies as Allianz SE’s underwriting vehicles for major multi-national accounts.”

Allianz Risk Transfer AG has been rated by A.M. Best for the first time. Its rating reflects its key role as a strategically important subsidiary company. A.M. Best writes: “As the group’s alternative risk transfer unit, ART benefits from the support of its ultimate parent Allianz SE. [...] The ratings reflect both implicit support in the form of business integration as well as explicit support from AGCS AG in the form of reinsurance, including stop loss reinsurance.“ A.M. Best expects continued stable results from the company, underpinned by its diverse portfolio, prudent underwriting approach and effective reinsurance management. With “A (stable)”, Allianz Risk Transfer AG enjoys an excellent rating.     

For a full copy of the A.M. Best’s press releases for AGCS and ART please refer to:
www3.ambest.com/pc