AM Best Removes From Under Review and Upgrades Issuer Credit Rating of Talanx AG and Removes From Under Review and Affirms Credit Ratings of Talanx Reinsurance (Ireland) SE

Business Wire

LONDON--(BUSINESS WIRE)-- AM Best has removed from under review with positive implications and upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” from “a-” of Talanx AG (Germany), the intermediate holding company of HDI Haftpflichtverband der Deutschen Industrie V.a.G. (HDI V.a.G), and assigned a Financial Strength Rating (FSR) of A (Excellent). AM Best also has removed from under review with positive implications and upgraded the Long-Term Issue Credit Rating (Long-Term IR) to “a” from “bbb+”of a debt instrument issued by Talanx Finanz (Luxembourg) S.A., and guaranteed by Talanx AG. Concurrently, AM Best has removed from under review with developing implications and affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” of Talanx Reinsurance (Ireland) SE (Talanx Re). The outlook assigned to these Credit Ratings (ratings) is stable. (See below for details on the Long-Term IR).

The ratings reflect Talanx AG’s and Talanx Re’s strategic importance to HDI V.a.G, and thereby the ratings reflect the group’s balance sheet strength of very strong, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management.

The rating actions for Talanx AG reflect the approval of a reinsurance license from the German regulator, BaFin, which will allow the company to write reinsurance business effective 1 January 2019. The transformation of Talanx AG to an operating holding entity will allow the group to implement its new target operating model, which will gradually transform Talanx AG into the main risk carrier for most of the internal non-life reinsurance treaty cessions (excluding facultative). Its expanded role as an internal reinsurer will broaden Talanx AG’s revenue sources, further improving financial flexibility that will lead to an increased ability to service ongoing and prospective obligations.

The rating affirmations of Talanx Re reflect its continuing strategic importance as a vehicle to manage the retention and provide technical support to the group’s Industrial Lines division, acting as a captive. The group expects the profile to improve over the coming years, as industrial risks will be supplemented by specialty risks going forward.

The Long-Term IR has been upgraded to “a” from “bbb+” for the following:

Talanx Finanz (Luxembourg) S.A.—

-- EUR 500 million 8.367% subordinated fixed to floating rate notes, due 2042

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

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