A.M. Best Affirms Ratings of Assicurazioni Generali S.p.A. and Assigns Issuer Credit Rating; Revises Outlook to Stable.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 of A+ (Superior) and assigned an issuer credit rating of "aa-" to Assicurazioni Generali Assicurazioni Generali S.P.A. is the largest insurance company of Italy.[1] It is headquartered in Trieste. Under the name of Imperial Regia Privilegiata Compagnia di Assicurazioni Generali Austro-Italiche, the company was founded on December 26, 1831. S.p.A. (Generali) (Italy). At the same time, A.M. Best has affirmed the ratings of debt instruments issued or guaranteed by Generali. (See list below.) The outlook on all ratings has been revised to stable from negative. The rating actions reflect Generali's strengthening business profile, excellent capitalisation and improving operating performance. An offsetting factor is the inherent mismatching Mismatching is the term given to the alleged negative effect that affirmative action has when it places a student into a college that is allegedly too diffucult for her. For example, according to the theory, in the absence of affirmative action, a student will be admitted to a college of the life liabilities with their backing assets, leading to potential volatility. Strengthening business profile--A.M. Best expects Generali's superior business position to continue strengthening as the company experiences above market average growth, especially in the life markets of Italy, France and eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. . A.M. Best estimates that consolidated life premiums grew by approximately 15%, driven by increased demand in Italy, France and the emerging markets. In 2005 premium growth rate is likely to reduce to the single-digit range due to the impact of the tax reforms in Germany, the restructuring of the Austrian operations and the decreasing demand for unit linked business. A.M. Best believes that the non-life business is likely to grow by less than 2% in 2005 (expected to have grown by almost 3% in 2004), driven by increased competition in personal lines. Excellent capitalisation--A.M. Best believes that Generali maintains its excellent risk-adjusted capitalisation as the impact of the strong business growth in 2004 is being mitigated by increased retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. and shifts toward lower risk products. The majority of the company's in-force life business continues to consist of policies with high return guarantees, resulting in strong dependence on investment returns, and potential impact of the guarantees on the life reserves has been factored into the rating. Any volatility in asset values arising from the implementation of the International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). is likely to be counterbalanced coun·ter·bal·ance n. 1. A force or influence equally counteracting another. 2. A weight that acts to balance another; a counterpoise or counterweight. tr.v. by similar movements in the respective liabilities. Excellent and improving operating performance--A.M. Best believes that life profitability is likely to continue improving in 2005 due to the impact of the improving business margins experienced in the Italian business and the continuing reduction in expense ratio. The non-life loss ratio is likely to start increasing in 2005, reversing the trend observed during the last three years as increased competition results in a rate decline in the more mature markets which Generali operates. A.M. Best believes that the consolidated combined ratio is likely to reach 102% in 2005 as loss ratio increases are partly offset by the company's ongoing cost reduction activities in France, Austria and Italy. The following debt ratings have been affirmed: Assicurazioni Generali, S.p.A.-- --"aa-" rating on 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. 750 million 4.5% senior debentures, due 2009 --"aa-" rating on EUR 1,750 million 6.15% senior Eurobonds, due 2010 --"a+" rating on EUR 750 million 6.9% fixed/floating rate subordinated callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. debentures, due 2022 Generali Finance B.V. (guaranteed by Generali-Assicurazioni Generali S.p.A.)-- --"aa-" rating on EUR 1,500 million 4.75% senior unsecured debentures, due 2014 --"a+" rating on EUR 500 million 5.065% fixed/floating rate subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before , due 2019 For Best's Debt Ratings, all other Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. 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 http://www.ambest.com. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion