A.M. Best Assigns Ratings to HDI Industrie Versicherung AG.OLDWICK, N.J. -- A.M. Best Co. has assigned a financial strength rating of A (Excellent) and an issuer credit rating of "a" to HDI HDI Human Development Index (UNDP yardstick of human welfare) HDI Help Desk Institute HDI Humpty Dumpty Institute (New York, New York) HDI High Density Interconnect Industrie Versicherung AG (HDI Industrie) (Germany). The outlook on both ratings is stable. The ratings reflect the enhancement received from the implicit support of HDI Industrie's immediate parent company, Talanx AG, which is ultimately owned by the mutual insurer, HDI V.a.G. Other rating factors are HDI Industrie's strong business profile in the German industrial insurance market, excellent operating performance despite a softening market and its excellent risk-adjusted capitalisation. Strong business profile--HDI Industrie remains one of the leading German industrial insurers. Following strong growth of 8% in 2004 mainly due to a shortage of capacity in liability and new business in property, A.M. Best expects 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. to decline by 2% to approximately 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. 1.5 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) in 2005 as premium rates have started to soften, especially in industrial property, and the company withdraws from inadequately priced business. The decline is partially alleviated by multi-year contracts written in 2004 and increased cross-selling activities leveraging HDI Industrie's outstanding client relationships. Excellent operating performance--A.M. Best expects HDI Industrie to increase earnings by approximately 50% to EUR 25 million (USD 31 million) (after transfer to equalisation Noun 1. equalisation - the act of making equal or uniform equalization, leveling human action, human activity, act, deed - something that people do or cause to happen reserves), as the anticipated deterioration of the combined ratio by approximately 3% to 91% from rate reductions in property and higher catastrophe claims is compensated by higher investment income. Excellent risk-adjusted capitalisation--In A.M. Best's opinion, HDI Industrie's risk-adjusted capitalisation is excellent, as a transfer to equalisation reserves of approximately EUR 80 million (USD 99 million) offsets higher capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. due to an increase in net retention and an increase in liability reserves. An offsetting factor is HDI Industrie's significant reliance on reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. despite an anticipated reduction in cession The act of relinquishing one's right. A surrender, relinquishment, or assignment of territory by one state or government to another. The territory of a foreign government gained by the transfer of sovereignty. CESSION, contracts. rates, which is partially alleviated by approximately 50% of reinsurance recoverables due from Hannover Re. For Best's Ratings, 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