A.M. Best Affirms Ratings of AVIVA Group and AmerUs Group; Places AmerUs' Ratings Under Review With Positive Implications.OLDWICK, N.J. -- 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 (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A+ (Superior) and the issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "aa-" of the main companies of the AVIVA Group (AVIVA) (United Kingdom). At the same time, A.M. Best has affirmed the ICR of "a" of the non-operating holding company, AVIVA plc. A.M. Best has also affirmed the ratings of a number of debt securities issued by AVIVA plc. The outlook for these ratings remains stable. A.M. Best has also affirmed the FSR of A+ (Superior) and the ICRs of "aa-" of Aviva Life Insurance Company (Delaware) and Aviva Life Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Concurrently, A.M. Best has placed the ICR of "bbb" of AmerUs Group Co. (AmerUs) (Iowa), the FSRs and ICRs of its key operating entities and its debt securities under review with positive implications. (See link below for a detailed listing of ratings.) The rating actions follow the announcement of AVIVA's planned acquisition of AmerUs, a U.S.-based insurer specialising in indexed annuity and life insurance products. A.M. Best believes that the acquisition of AmerUs will further enhance AVIVA's degree of geographical diversification, consistent with the group's strategy. Given the proposed financing of the transaction (of which about 50% is expected to be based on an equity issue) and the robust financial performance that both AVIVA and AmerUs have experienced in recent years, A.M. Best believes that the main financial strength and debt cover indicators will remain supportive of the current ratings. A.M. Best will need to evaluate the impact on AmerUs of synergies, funding plans and parental support expected to be provided by AVIVA prior to resolving the under review status. Broader degree of geographical diversification -- AVIVA has a well diversified business profile, being the leading life and personal lines insurance provider in the United Kingdom, as well as maintaining a significant presence in a number of European markets. The acquisition of AmerUs is expected to increase AVIVA's exposure to the U.S. life market from a currently modest 2% to around 10% of the group's present value of new life business premiums. In A.M. Best's opinion, the announced transaction is consistent with AVIVA's strategy for growth and diversification in key markets. Robust financial performance -- A.M. Best expects AVIVA to continue to generate strong operating results as shown in recent years, with total post-tax operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. in excess of GBP GBP In currencies, this is the abbreviation for the British Pound. 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. 1 billion (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. 1.8 billion) for 2006. Profitability should continue to benefit from economies of scale as a result of the group's expansion strategy, with AmerUs likely to continue to show steady net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in excess of GBP 100 million (USD 180 million) in 2006. The combined ratio of non-life business is likely to increase slightly, although it will still remain consistent with the 98% target, mainly due to increased competition in the U.K. motor insurance market. Risk-based 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 remains supportive of current rating post-acquisition -- A.M. Best believes that the main financial strength indicators will remain supportive of the current ratings following the completion of the acquisition of AmerUs. The increased capital and debt service requirements stemming from the acquisition are expected to be significantly covered by both a 50% equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. of the transaction and the robust earnings ability of the combined group. For a complete listing of AVIVA Group's and AmerUs Group's FSRs, ICRs and debt ratings, please visit www.ambest.com/press/071301aviva.pdf 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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