A.M. Best Affirms Ratings of N.V. Unive Her

A.M. Best has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-" of N.V. Unive Her (Unive Her) (Netherlands).

The outlook for both ratings remains stable.

The ratings reflect Unive Her's excellent risk-adjusted capitalisation and good business profile as a specialist reinsurer within its domestic market. Offsetting these positive rating factors is the company's volatile operating performance which is in part linked to its concentration in one geographic market and line of business.

In 2012, OVM Unive Stormher u.a. - a former affiliate specialised in writing the group's catastrophe business - merged into Unive Her. The acquisition of the catastrophe excess of loss portfolio from OVM Unive Stormher u.a. has increased the volatility in the company's technical results. In 2013, Unive Her reported an underwriting loss of EUR 10.7 million (EUR 3.9 million profit for 2012) following unusually high frequency of fire claims and one large natural catastrophe. These losses were offset by releases from the company's catastrophe reserve, which operates like an equalisation reserve, allowing Unive Her to post a profit after tax of EUR 1 million for the full year. Despite the decrease in the catastrophe reserve, the company's overall risk-adjusted capitalisation remains excellent.

Unive Her maintains a specialist business profile as the sole property reinsurer for the 16 Unive property mutuals, which are members of the parent company Cooperatie Unive U.A. Although both geographical and business line diversification remain limited, Unive Her benefits from a very loyal and stable customer base. The company possesses extensive knowledge of its customers' insurance needs and is able to offer technical support and competitive pricing.

Upward rating movements at this point are unlikely. Downward rating movements could be triggered by a material reduction in Unive Her's risk-adjusted capitalisation as a result of further large catastrophe losses.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process.

A.M. Best Company is an insurance rating and information source.

More Information:

www.ambest.com

www.ambest.com/ratings/methodology

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