A.M. Best Lowers Rating of Allianz Life.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 8, 2002 A.M. Best Co. has lowered the financial strength rating to A+ (Superior) from A++ (Superior) of Allianz Life Insurance Company of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. (Minneapolis, MN) and removed it from under review. The rating outlook remains negative. At the same time, A.M. Best has lowered the financial strength rating to A+ (Superior) from A++ (Superior) of Preferred 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 , which is based on its operating relationship with Allianz Life. The rating has been removed from under review, and the outlook is negative. The rating reflects the fact that Allianz Life's operating performance and stand-alone capital position have come under significant pressure due to surplus strain associated with rapid expansion of its annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. operations, development costs in its smaller business lines and sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. investment losses since 2001. Allianz Life's aggressive
growth also has increasingly concentrated the company's business
profile and insurance risk in the individual annuity market. As a
result, A.M. Best believes that Allianz Life is less likely to develop a
leading, broad-based U.S. market position over the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future than was previously anticipated. Although Allianz AG, Allianz Life's ultimate parent, has supported its main U.S. life subsidiary's recent expansion through capital contributions, surplus growth has not kept pace with increased risk-based capital needs. The negative outlook reflects Allianz Life's weak capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. relative to its rating and the significant funding needs of the company to support its growth strategy. These capital needs are occurring at a time when Allianz AG's (rated A++ with a negative outlook) operating results and financial flexibility have come under increasing pressure due to poor operating performance from several insurance subsidiaries and Dresdner Bank Dresdner Bank AG is one of Germany's largest banking corporations and is based in Frankfurt. History 19th century Dresdner Bank was established on 12 November 1872 through the conversion of financial institution Michael Kaskel. and the impact of weak global investment markets. While A.M. Best believes Allianz Life is strategically important to Allianz AG and that Allianz AG has the capacity to meet the future capital needs of its U.S. insurance operations, A.M. Best will continue to monitor the parent company's willingness to infuse in·fuse v. 1. To steep or soak without boiling in order to extract soluble elements or active principles. 2. To introduce a solution into the body through a vein for therapeutic purposes. capital at levels necessary to support Allianz Life's current rating. 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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