A.M. Best Affirms Credit Ratings of Allianz SE and Most of Its Rated Subsidiaries

LONDON--(BUSINESS WIRE)-- A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa” of Allianz SE (Allianz) (Germany) and most of its rated subsidiaries. (See below for the list of the companies.) Concurrently, A.M. Best has upgraded the Long-Term ICR to “aa” from “aa-” and affirmed the FSR of A+ (Superior) of Euler Hermes North America Insurance Company (Owings Mills, MD). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Allianz’s balance sheet strength, which A.M. Best categorises as strongest, as well as its strong operating performance, very favourable business profile and very strong enterprise risk management.

Allianz is one of the world’s largest insurance groups, with superior diversification by geography and business line, and leading positions in many developed and emerging markets, offering a complete range of life and non-life insurance products, as well as asset management services. Its scale, strong management capabilities, dynamic strategy and strong brand support its competitive position. Despite a significant negative foreign exchange impact in 2017, the group grew its revenue by 3%, boosted by strong sales in the life/health division. Notable developments in 2017 include the acquisition of the outstanding shares of Euler Hermes Group S.A. (Euler Hermes), a credit insurer, as well as the formation of a joint venture with Liverpool Victoria Friendly Society (LV=), a U.K. personal lines insurer.

A.M. Best expects Allianz’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, to be maintained at the strongest level, supported by a prudent capital management approach. Financial leverage and coverage ratios are supportive of the balance sheet strength assessment and financial flexibility is considered excellent due to the group’s access to capital markets.

Allianz has a track record of strong and stable performance, supported by its diversified earnings profile. The group produced strong results in 2017, in spite of losses from catastrophe events in North America. Core operating entities performed well, with the exception of a small number where remedial actions are already underway. The group’s profitable and scalable asset management business continues to provide a good additional source of income (approximately 22% of the group’s operating profit in 2017). Prospective earnings are expected to remain strong over the medium term.

The Long-Term ICR upgrade for Euler Hermes North America Insurance Company is based on the company’s strategic importance to Allianz. This follows the completion of the buy-out of its parent, Euler Hermes, by Allianz in 2018.

The FSR of A+ (Superior) and the Long-Term ICR of “aa” have been affirmed for Allianz SE and its following subsidiaries:

• Allianz Global Corporate & Specialty SE
• Allianz S.p.A
• Allianz Risk Transfer AG
• Allianz Risk Transfer (Bermuda) Limited
• AWP P&C S.A.
• Jefferson Insurance Company
• AWP Health & Life S.A.
• Allianz Global Risks US Insurance Company
• Allianz Underwriters Insurance Company
• AGCS Marine Insurance Company
• American Automobile Insurance Company
• National Surety Corporation
• The American Insurance Company
• Associated Indemnity Corporation
• Chicago Insurance Company
• Fireman’s Fund Insurance Company
• Fireman’s Fund Indemnity Corporation
• Fireman’s Fund Insurance Company of Hawaii, Inc.
• Interstate Fire & Casualty Company
• Allianz Life Insurance Company of North America
• Allianz Life Insurance Company of New York
• Allianz Global Corporate & Specialty Resseguros Brasil S.A.

The following Long-Term IRs have been affirmed with a stable outlook:

Allianz Finance II B.V. (debt issues are guaranteed by Allianz SE) —
-- “aa-” on EUR 2 billion 5.75% subordinated bonds, due 2041 
-- “a+” on EUR 800 million 5.375% perpetual subordinated bonds
-- “aa” on EUR 750 million 3% senior unsecured bonds, due 2028 
-- “aa” on GBP 750 million 4.5% senior unsecured bonds, due 2043 
-- “aa” on EUR 1.5 billion 3.5% senior unsecured bonds, due 2022 
-- “aa” on EUR 1.5 billion 4.75% senior unsecured bonds, due 2019

Allianz SE— 
-- “a+” on EUR 1.5 billion 4.75% perpetual subordinated bonds 
-- “a+” on CHF 500 million 3.25% perpetual subordinated bonds 
-- “a+” on USD 1 billion 5.5% perpetual subordinated bonds 
-- “aa-” on EUR 1.5 billion 5.625% subordinated bonds, due 2042 
-- “a+” on EUR 1.5 billion 3.375 perpetual junior subordinated bonds

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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A.M. Best

Tim Prince, +44 20 7626 6264

Director, Analytics

timothy.prince@ambest.com

or

Jeffrey Stary, +1 908 439 2200, ext. 5689

Financial Analyst

jeffrey.stary@ambest.com

or

Erik Miller, +1 908 439 2200, ext. 5187

Senior Financial Analyst

erik.miller@ambest.com

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Christopher Sharkey, +1 908 439 2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

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Jim Peavy, +1 908 439 2200, ext. 5644

Director, Public Relations

james.peavy@ambest.com

Source: A.M. Best