A.M. Best Affirms Ratings of Assicurazioni Generali S.p.A.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and the issuer credit rating of "aa-" of 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 for all ratings remains stable. The ratings reflect Generali's strong operating performance and capitalisation despite increasing financial leverage. Generali's results for 2005 were in line with A.M. Best's expectations, having increased by approximately 15% to 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. 1,918 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. 2,309 million) in 2005, driven by strong growth in life premiums and a decline in expenses. A.M. Best believes that Generali's operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. ratio is likely to continue to decline as a result of the company's plan to improve operational performance over the next three years. Execution risks arising from the implementation of Generali's newly published business plan are likely to be mitigated by the company's strong execution skills, as exhibited during the integration of its largest acquisitions. Capitalisation will remain strong despite the company's decision to buy back EUR 1.8 billion (USD 2.17 billion) worth of shares and to acquire EUR 2.3 billion (USD 2.77 billion) of minority shareholdings. These actions will be financed by a EUR 4 billion (USD 4.82 billion) subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". issue, which will bring Generali's proportion of debt leverage close to A.M. Best's tolerance levels in the short term. Although the exact nature of the debt issue is still to be finalised, A.M. Best believes that it is likely to justify almost full equity credit in its quantitative analysis Quantitative Analysis A security analysis that uses financial information derived from company annual reports and income statements to evaluate an investment decision. Notes: of Generali. The following debt ratings have been affirmed: Assicurazioni Generali S.p.A.-- --"a+" rating on EUR 750 million 4.5% senior debentures, due 2009 --"a+" 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.)-- --"a+" rating on EUR 1,500 million 4.75% senior unsecured debentures, due 2014 --"a+" rating on EUR 500 million 3.875% senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. , due 2015 --"a" rating on EUR 500 million 5.06% fixed/floating rate subordinated debentures, due 2019 For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit 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 www.ambest.com. |
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