A.M. Best Affirms Rating of Riunione Adriatica di Sicurta S.p.A.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 8, 2003 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A+ (Superior) of Riunione Adriatica di Sicurta S.p.A. (RAS (1) See network access server. (2) (Remote Access Service) A Windows NT/2000 Server feature that allows remote users access to the network from their Windows laptops or desktops via modem. See RRAS and network access server. ), Italy. The outlook is negative. The rating reflects the company's status as a core subsidiary of its ultimate parent, Allianz Aktiengesellschaft (Allianz), superior consolidated risk-adjusted capitalisation n. 1. same as capitalization. Noun 1. capitalisation - writing in capital letters capitalization writing - letters or symbols that are written or imprinted on a surface to represent the sounds or words of a language; "he turned the paper , improving underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. performance and excellent business profile in Italy. Offsetting factors include the effect of low interest rates on life business margins and deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in underlying operating performance due to investment write-downs. Core status--RAS is regarded as a core subsidiary of Munich-based Allianz. The company acts as the holding company to several subsidiaries mainly in continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. , enhancing Allianz's international profile. A.M. Best continues to closely monitor this core status in accordance with criteria developments prompted by market trends. Superior consolidated risk-adjusted capitalisation--RAS has improved its risk profile through the divestment divestment to strip one's investment from an entity. of a substantial proportion of its equity portfolio, in addition to increased diversification in its composite book. A share buy-back, which concluded in January 2003, reduced share capital by EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 800 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 868.6 million); however, A.M. Best has not seen a material effect on the risk-adjusted capitalisation overall. Improving underwriting performance--The consolidated combined ratio improved by 3.5% to 103.6% in 2002, due to enhancements in risk selection and streamlining of operational activities. Consolidated operating performance in 2002 is boosted considerably by the sale of real estate during the year, realising a net gain of EUR 876 million (USD 951 million). This has contributed to a return on equity (ROE) of 18%. The ROE for 2002--ignoring this realised gain--is a loss on equity of 0.6%, which is largely due to net investment write-downs of EUR 700.8 million (USD 760.9 million) during the year. The life operations of Allianz Suisse in particular continue to restrict consolidated profitability, although an improvement is expected in 2003. Excellent business position--On a consolidated basis, RAS is the second-largest life and third-largest non-life insurer in Italy. Growth in premiums generated in Italy exceeded market growth in 2002, 8.4% in non-life (whilst improving profitability) and 25.8% in life primarily through bancassurance Bancassurance A French term referring to the selling of insurance through a bank's established distribution channels. Notes: The result is a bank that can offer banking, insurance, lending, and investment products to a customer. channels. Growth for 2003 is expected to continue in line with 2002. Expectations: -- Further enhancements in risk selection will lead to improved underwriting performance for non-life operations in 2003 and 2004, particularly in Italian motor business. The consolidated non-life combined ratio is expected to fall to approximately 100% in 2003. -- Operating performance for life operations will remain depressed by continuing weak investment conditions. The increased sale of more traditional life products would improve profitability through the higher business margins and reduced dependence on equity markets. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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