A.M. Best Affirms Credit Ratings of Credendo – Single Risk Insurance AG

Business Wire

LONDON--(BUSINESS WIRE)-- A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Credendo - Single Risk Insurance AG (Credendo - Single Risk) (Austria) (formerly known as Garant Versicherungs - Aktiengesellschaft). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect Credendo - Single Risk’s maintenance of strong risk-adjusted capitalisation, in spite of an 18% decline in shareholders’ funds to EUR 24.5 million during 2016. The company’s weak operating performance in 2016 and its limited business profile, as a small niche provider of political and trade credit single-risk cover specialising in emerging markets, are also taken into consideration. In addition, the ratings reflect the company’s affiliation with and the support provided by its majority shareholder, Credendo Export Credit Agency (formerly known as Delcredere Ducroire), which is the operating holding company of a group of trade credit and political risk insurance companies.

A.M. Best expects Credendo - Single Risk’s risk-adjusted capitalisation to remain strong, supported by low underwriting leverage and comprehensive reinsurance cover. The company benefits from explicit parental support provided by Credendo Export Credit Agency.

Shareholders’ funds fell during 2016 due to a large operating loss. However, the impact on risk-adjusted capitalisation was offset by a reduction in underwriting risk. The company has reduced exposure to unprofitable and volatile business, and made adjustments to its reinsurance programme in order to moderate prospective earnings volatility.

As a mono-line credit insurer, the company’s performance can be volatile, as it is highly correlated to changes in the global political and economic environment. This was demonstrated in 2016 when Credendo - Single Risk recorded a net loss of EUR 5 million (EUR 0.04 million net profit in 2015) due to a number of large underwriting losses.

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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best

Konstantin Langowski, +44 20 7397 0318

Financial Analyst

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Catherine Thomas, +44 20 7397 0281

Senior Director, Analytics

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

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

Director, Public Relations

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