A.M. Best Affirms the Credit Ratings of Aviva plc and Its Subsidiaries
The ratings reflect Aviva’s balance sheet strength, which
A.M. Best’s calculation of risk-adjusted capitalisation for the combined group includes a significant contribution from unallocated divisible surplus, value in the group’s life segment that is not reflected in IFRS reporting (assessed using Solvency II disclosure) and hybrid borrowings. Although the first two of these elements can be volatile and subject to fungibility constraints,
Aviva’s financial leverage and interest coverage ratios are supportive of the very strong balance sheet assessment. Most of Aviva’s capital is located in the group’s life subsidiaries. An internal loan from the main non-life subsidiary to a fellow group subsidiary, which is not part of the financial leverage calculation, in part reflects fungibility constraints. The ratings and outlooks incorporate A.M. Best’s expectation of rising nearer term cash flow, which mitigates these constraints.
Aviva is obtaining strong returns from a mature profile of activities. Whilst A.M. Best’s five-year average return on capital for the company is 9.3%, removing intangible items from both the return and capital lifts this percentage by 3-4 percentage points. In addition, this period featured significant non-operating costs (apart from intangible amortisation) and
The exceptionally diverse range of operations across life and non-life and across territories is a positive rating factor for the group’s profile. The group has leading market positions in the
The FSR of A (Excellent) and the Long-Term ICRs of “a+” have been affirmed for the following subsidiaries of Aviva plc. The outlook of these ratings remains stable.
-
Aviva Insurance Limited -
Aviva International Insurance Limited -
Aviva Insurance Company of Canada -
Elite Insurance Company -
Traders General Insurance Company -
Pilot Insurance Company -
Scottish & York Insurance Company, Limited -
S&Y Insurance Company
The following subordinated Long-Term IRs have been affirmed with a stable outlook:
Aviva plc—
-- “bbb+” on
-- “bbb+” on
-- “bbb+” on
-- “bbb+” on
The following direct capital instrument Long-Term IRs have been affirmed with a stable outlook:
Aviva plc—
-- “bbb” on
The following indicative Long-Term IRs on shelf securities have been affirmed with a stable outlook:
Aviva plc—
-- “bbb+” on senior subordinated notes
-- “bbb” on junior subordinated notes
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
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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A.M. Best Revises Issuer Credit Rating Outlook to Positive for CNA Financial Corporation and Its Subsidiaries
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