The U.S. leads the pack in the percentage of older adults who have trouble paying their medical bills.
A.M. Best Europe - Rating Services Limited has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of Schweizerische National-Versicherungs-Gesellschaft AG (Nationale Suisse) (Switzerland).
The ratings and revised outlook of Nationale Suisse reflect its improving operating performance and strong risk-adjusted capitalisation. The ratings also take into account the company's evolving business profile.
A.M. Best expects Nationale Suisse's profits to increase in 2012 and 2013, supported by further strong non-life results domestically and improving profitability in the foreign business where the company has been reinforcing its underwriting function. This disciplined underwriting approach is forecast to result in a combined ratio in the low 90s in 2012 and 2013. In 2011, Nationale Suisse's after-tax profit rose by 182 percent to CHF 167.7 million, following a significant motor-related reserve release. Excluding this reserve release, the after-tax profit increased by 9.2 percent to CHF 100.6 million in 2011.
A.M. Best believes that Nationale Suisse's prospective risk- adjusted capitalisation will remain strong, taking into account its growth plans and relatively low risk profile. Capitalisation is expected to be supported by good earnings retention after dividends of one-third to one-half of net profit. The company continues to protect its capital base by using prudent underwriting limits and a comprehensive reinsurance program.
Nationale Suisse has a good business profile in its domestic market where it has been growing above market average in its target lines of business. The company is continuing with the optimisation of its business mix and is focusing on growing its domestic and specialty lines businesses. Nationale Suisse further reduced its life business in 2011 and is increasingly focusing on less capital intensive products. For 2012, A.M. Best expects Nationale Suisse's overall business volumes to stabilize at approximately CHF 1.5 billion. The good anticipated growth in the non-life Swiss business will be largely offset by a further decrease in life premiums. Specialty line business development is expected to be affected by unfavourable exchange rates, the cancellation of some unprofitable business and a decrease in premiums written within the credit business.
The ratings of Nationale Suisse could increase if it continues to improve the profitability of its foreign business, while maintaining good technical results in its core Swiss business.
The ratings could be negatively impacted by excessive premium growth resulting in a deterioration in the company's operating performance and risk-adjusted capitalisation.
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