A.M. Best Assigns A++ Rating To Allianz AG Group.OLDWICK, N.J.--(BUSINESS WIRE)--Oct. 18, 1999-- A.M. Best Co. today assigned a Best's Rating 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. of A++ (Superior) to Allianz AG group. The rating applies to the Allianz group and its core property/casualty, life/health and credit group members, represented by the 25 companies listed below. The rating reflects the group's leading global market position, exceptional balance sheet strength, sustained profitable growth and the demonstrated success of its management's strategies. Allianz is the second-largest insurer in the world, with gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. approximating $50 billion. As a result of its 1997 acquisition of AGF AGF Assurances Générales de France AGF Army Ground Forces AGF American Growth Fund (mutual fund) AGF American General Finance AGF Arbeitsgemeinschaft der Grossforschungseinrichtungen AGF Anatomic Gift Foundation AGF Assume Good Faith , a leading French insurer, Allianz ranks among the top five insurers in most European markets and maintains a dominant position in its home market of Germany, with nearly a 20% market share. Allianz also is a recognized leader in industrial risk business providing broad product capabilities, large lines capacity and a corporate network located in 68 countries that can accommodate and service large multinational risks. A.M. Best expects Allianz to continue to make selective and prudent acquisitions to further its stated strategy of being among the top five providers in the most important markets. Allianz further benefits from its decentralized de·cen·tral·ize v. de·cen·tral·ized, de·cen·tral·iz·ing, de·cen·tral·iz·es v.tr. 1. To distribute the administrative functions or powers of (a central authority) among several local authorities. operating structure, which encourages regional market autonomy with strong local branding to foster customer loyalty and high business persistency. This structure also has enabled the group to assimilate large acquisitions with minimal business disruption. The success of Allianz's highly focused market segmentation Market Segmentation A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. strategy is evidenced by its long-term profitable growth, market leadership positions, increasingly diversified risk portfolio and broad service capabilities. Each of the core group members are charged with furthering this strategy and increasing the economic value of the overall Allianz group as measured by targeted returns on allocated capital. This focus on profit is evident in the group's reported results, with pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern returns on premium of close to 13% over the past two years and total returns, after tax, on equity averaging just under 10% for the same period. Allianz's balanced 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. risk profile, given its global nature and multiple product capabilities, minimizes earnings volatility and provides for more stable earnings trends. One-third of Allianz's book is comprised of life/health business while its property/casualty book is largely represented by short- to moderate-tail risks. Allianz also maintains strong capitalization supported by its conservative loss-reserving philosophy, moderate operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. and diversified asset base. It also has developed strong centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. risk-management procedures to monitor and control balance sheet exposures Balance sheet exposure See: Accounting exposure. to catastrophe, investment, credit, and market risks. The group's financial strength is further enhanced by its access to capital markets, including debt and equity. Allianz currently maintains substantial market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. and is listed as one of the top 10 companies in Europe, with its stock performance surpassing the DAX index over the past 10 years. The group recently listed on the Paris exchange and plans to list on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . With its recent conversion to International Accounting Standards, Allianz has further strengthened its competitive platform in the international markets by increasing financial transparency and appealing to a broader investor base. Allianz's strong financial flexibility should enable it to finance most acquisitions effectively without adversely affecting its existing ratings. Offsetting these positive factors is the uncertainty created by the group's potential exposure to claims arising from Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 . Allianz, however, has been carefully monitoring the situation and has taken aggressive steps to manage and minimize potential exposures. Although the group's financial leverage has increased in recent years, it remains well within the expectations of its rating level and is further tempered by the group's strong fixed charge coverage driven by superior profitability. In addition, the increased debt levels have served to support the group's growth strategies. While certain operations within the group have not achieved expected performance levels, A.M. Best has extended the group rating to these entities recognizing their prospective contribution to the overall group and Allianz's demonstrated commitment to these important market segments. A.M. Best therefore views Allianz's rating outlook as stable. The rating applies to the following companies, which A.M. Best considers to be core subsidiaries of the Allianz group, as they are integral to the overall group strategy and are critical to its ongoing success and viability. In addition, these companies, which generate approximately 90% of its total business, are material contributors to Allianz's market profile, operating performance, and financial strength and are generally well established within their individual market segments. Germany Allianz Aktiengesellschaft -- A++g Allianz Versicherungs-AG -- A++g Allianz Lebenversicherungs-AG -- A++g Frankfurter Versicherungs-AG -- A++g Bayerische Versicherungsbank AG -- A++g Vereinte Versicherung AG -- A++g Vereinte Lebensversicherungs AG -- A++g Vereinte Krankenversicherungs AG -- A++g Hermes Kreditversicherungs AG -- A++g France Assurances Generales de France (AGF) -- A++g Assurances Generales de France IART IART Impact Area Review Team IART Intraatrial Reentrant Tachycardia IART Initial Access Response Time (IBM) IART Image-Guided Adaptive Radiation Therapy -- A++g Assurances Generales de France Vie -- A++g Assurances Generales de France MAT -- A++g Italy Riunione Adriatica di Sicurta SpA (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. ) -- A++g Lloyd Adriatico SpA -- A++g Austria Allianz Elementar Versicherung-AG -- A++g Allianz Elementar Lebenversicherungs-AG -- A++g Switzerland Elvia Schweizerische Versicherungs-Gesellschaft -- A++g Elvia Schweizerische Lebensversicherungs-Gesellschaft -- A++g United Kingdom Cornhill Insurance PLC -- A++g Canada Allianz Insurance Company of Canada -- A++g Trafalgar Insurance Company of Canada -- A++g United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Fireman's Fund Insurance Companies Fireman's Fund Insurance Company is a Novato, California-based insurance company owned by Allianz SE of Germany. It was founded June 18 1863 and issued its first policy to Walter Hawxhurst covering one half interest in 1,000 kegs of Boston syrup for a premium of $12. -- A++g Allianz Insurance Company -- A++g Allianz Life Insurance Company of N. A. -- A++g In-force ratings of other Allianz Group companies are not affected by this action. 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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