AM Best Assigns Ratings: Allianz Risk Transfer
Rating company A.M. Best has assigned a financial strength rating of A+ [Superior] and an issuer credit rating of “aa-” to Allianz Risk Transfer [Bermuda] Limited [ART Bermuda] [Bermuda]. The outlook assigned to both ratings is stable.
A statement from the ratings agency said, “The ratings reflect the company’s strategic importance to Allianz Risk Transfer AG [ART], whose ultimate parent is Allianz SE [Germany]. Additionally, the ratings reflect the company’s moderate level of risk-adjusted capitalisation and the expectation of good operating performance.
“ART Bermuda’s operating licenses in Bermuda helps facilitate the strategy of ART, particularly with regards to insurance-linked markets [ILM] and reinsurance solutions business lines. Moreover, ART Bermuda’s management team and operating systems are highly integrated into those of its larger parent, and the company’s activities benefit from a comprehensive financial guarantee from ART.
“ART Bermuda’s risk-adjusted capitalisation is expected to improve over the next two years as its higher risk investments run off and proceeds are reinvested into traditional asset classes. Underwriting performance improved to a good level in 2014 following the adjustment of the commission structure for the company’s ILM business.
“Domiciled in Bermuda, ART Bermuda is a key operating subsidiary of ART. It is active in markets for insurance-linked securities, reinsurance solutions, corporate solutions and weather-related risks. It also manages structured investments that are in run-off and a portfolio of third-party natural catastrophe bonds. ART itself is a core operating unit of Allianz Global Corporate & Specialty SE, which globally manages the corporate and specialty business lines of Allianz SE.
“A change in the creditworthiness of Allianz SE could have a corresponding positive or negative impact on the ratings of ART Bermuda. In addition, a weakening of risk-adjusted capitalisation, failure to maintain positive operating results, or a perceived reduction in the level of support offered to ART Bermuda from its parent company would add negative pressure to the ratings.”
