A.M. best Europe - Rating Services Limited has the financial strength rating (FSR) "A" (Excellent) and issuer credit rating (ICR) of "a" by Germany's HDI Haftpflichtverband of der Deutschen Industrie v.a.g. (HDI v.a.g.), the mutual parent company of Talanx AG, confirmed that, in turn, the advanced management holding for all HDI v.a.g. company (together in the group is).
Best confirmed also the FSR of "A" (Excellent) and the ICRs of "a" of the HDI-Gerling Industrie Versicherung AG (HDI-Gerling industry) and its subsidiary HDI-Gerling World Service AG, the leading non-life insurance direct operation within the Talanx AG and HDI-Gerling Lebensversicherung AG (HDI-Gerling life), the leading life insurance operation within the Talanx AG.
In addition, best affirmed the ICR from "Bbb +" of Talanx AG and reaffirmed the debt rating "Bbb" on the junior € 350 million [460.6 million$] child fixed to floating rate notes, issued by 2025 by Talanx AG.
Best's financial strength rating confirmed also the ' A'(Excellent) and issuer credit rating of "a" of the HDI-Gerling Lebensversicherung AG (HG-LV), Talanx life insurance, with stable Outlook for both, such as also his ratings on US operations of the company, Gerling America Division.
The Outlook for all the ratings is stable.
In an similar operation , confirmed best's financial strength rating and the issuer credit rating of "a" Germany's HDI-Gerling Industrie Versicherung AG (HGI) and evaluated subsidiary HDI-Gerling World Service AG (HG WS).
Best said that he expected that Talanx AG "supports still excellent consolidated risk-adjusted market capitalization in 2012 by significant non-realized gains on bond portfolio of the company, as well as retained earnings are expected to show an improvement on 2010."
"Compared to peripheral debt at about 15 percent of the capital and the surplus has Talanx AG a relatively low level of exposure in the third quarter of 2011;" total exposure to peripheral euro zone debt, including mortgage bonds, is higher at about 60% of capital and surplus.
"The Group has also a high degree of exposure to euro zone financial institutions senior and subordinated debt at about 180 percent of the capital and the surplus in the third quarter of 2011." However, a significant portion of this debt in German and Dutch financial institutions finds a good credit rating, with much of the blame also secure life liabilities with the potential for losses of policyholders are absorbed. "This negative assessment factors are partly by the heavy shift within the portfolio of compared to German corporate and sovereign debt, which in recent months clearly estimated offset."
Best explained also, that it "2011 to increase the net income, after tax and minorities to about 400 million euros [US$ 526.4 million] of 220 million [$ 290] in 2010 expected Talanx AG, driven by good underwriting results across all lines of business with the exception of the non-life reinsurance, heavy losses suffered the disaster." Net profit of € 220 million was effort of 2010 through a series of one-time restructuring expenses as well as costs associated influenced activities in the group with the merge of the Aspecta life.
The report pointed out that "Talanx AG benefits an excellent profile in the German and international reinsurance markets." The Group has a number of strategic acquisitions in the course of the year, which are expected to improve their business profile within the international retail. The recently announced acquisition of TU Europe SA (Towarzystwo Ubezpiecze? Europe SA and Towarzystwo Ubezpiecze? na ?ycie Europe) and TUiR Warta S.A. (Towarzystwo ubezpieczen I Reasekuracji Warta S.A.) business profile of the group in the target markets of Poland and Eastern Europe should improve.
"Overall, premium growth is international lines (in particular Brazil and Poland) and non-life reinsurance of around 5 percent in 2012 with growth primarily through retail expected (due to the higher interest rates and new business gains)." The Division retail Germany should remain flat as declining life offset sales growth in non-life premiums as a result of a better evaluation environment, particularly in motor insurance.
"Upward rating actions may occur if the group to improve its risk-adjusted market capitalization operation, technical performance, and business profile within the Group were, emerging markets." An improvement of the financial flexibility of the company, through a possible initial public offering, can the ratings of upward pressure on.
"Negative rating actions may occur, if there was a significant deterioration in the Group's risk-adjusted market capitalization, possibly driven by huge losses in their exposure to debt in the euro zone." Poor execution and integration of the Group's mergers and acquisitions strategy can also have negative on the ratings pressure.
Source: A.M. best
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