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Allianz Global Corporate & Specialty confirmed AA (stable) by Standard & Poor's

Standard & Poor's once again confirmed the stand-alone AA (stable) financial strength rating on August 12 for Allianz Global Corporate & Specialty (AGCS), the industrial arm of the Allianz Group.

PRESS RELEASE - New York/Munich. August 12, 2010

The rating applies to Allianz Global Corporate & Specialty AG (AGCS AG), Allianz Global Corporate & Specialty (France) (AGCS France), Allianz Global Risks U.S. Insurance Co. (AGR US). As previously announced, the rating of AA (negative) for the AGCS subsidiary Allianz Fire and Marine Insurance Japan Ltd. (AZFM) is based on the AGCS AA rating but is constrained by the sovereign credit rating of Japan.

AGCS has therefore maintained its position as one of the highest-rated insurers in its sector. S&P listed several factors that led to this decision:

"[S&P] considers AGCS AG, the main carrier of the AGCS group, to be integral to AZSE's strategy, owing to AGCS AG's status as the Allianz group's dedicated carrier for global industrial and specialty lines business, its size, competitive position, and strong capitalization."

"We view AGCS' capitalization as strong because of its currently extremely strong capital adequacy and adequate reserving."

"In addition, we believe that AZSE is committed to maintaining AGCS' capitalization at a level commensurate with our expectations for a core operation and to support AGCS financially if necessary."

"AGCS' well-diversified business portfolio, selective underwriting policy, and further efficiency improvements should contribute to sustainably positive underwriting results."

"AGCS has a strong competitive position in Europe, benefiting from its ability to offer significant capacity, brand strength, and strong underwriting services. We view its position in the U.S. markets as good and developing, through diversifying its business mix."

"The formation of AGCS has further improved the customer interface and operational controls through a unified technical infrastructure, harmonized product and distribution policy, and the ongoing transfer of regional industrial lines portfolios throughout the Allianz group to AGCS' entities and branches."

"We expect AGCS to remain a core, underwriting-focused business, demonstrating a performance in line with its parent's expectations. Specifically, we anticipate that AGCS will report an underlying combined ratio of at least 97%, taking into account budgeted natural catastrophe experiences and absent extraordinary reserve releases, and a return on revenue of at least 10%."

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