S&P Affirms Ratings on Members of Allianz Group.Business Editors LONDON--(BUSINESS WIRE)--Standard & Poor's Dec. 22, 1999--Standard & Poor's today 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. its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit and insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. financial strength ratings on entities of the Munich-based international insurance group Allianz Allianz SE[1], (ISIN: DE0008404005; IPA pronunciation: [alli-anz], and formerly AG) is a large financial service provider headquartered in Munich, Germany. . At the same time, the outlook on group member Lloyd Adriatico SpA was revised to positive from stable, and the outlooks on Cornhill Cornhill can refer to:
The ratings reflect Allianz's extremely strong business position in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , extremely strong 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. , superior financial
flexibility, and strong profitability. Partly offsetting these strengths
is the more aggressive use of capital going forward.Major rating factors: -- Extremely strong business position. Allianz enjoys an enviable en·vi·a·ble adj. So desirable as to arouse envy: "the enviable English quality of being able to be mute without unrest" Henry James. position in the German life and nonlife markets, in which it is clearly the market leader. Following its acquisitions 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 - Assurances Generales de France and of First Life of Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. , Allianz also has top-five positions in France, Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , and Korea, as well as in Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. , and Austria Austria (ô`strēə), Ger. Österreich [eastern march], officially Republic of Austria, federal republic (2005 est. pop. 8,185,000), 32,374 sq mi (83,849 sq km), central Europe. . The acquisition of U.S. fund managers Pimco Advisers places Allianz also among the top-seven asset managers globally. However, to satisfy its ambition of becoming a global commercial lines insurer, Allianz must consolidate its positions in the U.S., the U.K., Japan, and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . This will require acquisitions in some cases. -- Superior capitalization, both in absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute and relative to Allianz's business requirements. Although capital adequacy has been diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. to some extent by the AGF acquisition and by general organic growth, and will be diluted further by the Pimco acquisition, the group's risk-based capitalization is expected to remain comfortably in the triple-'A' range according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Standard & Poor's model. -- Operating performance is strong when adjusted for a normalized return on equity investments. On this basis, return on equity in 1998 was 11.7% for property/casualty (p/c p/c or P/C abbr. 1. petty cash 2. prices current ) business and 9.6% for life and health. Profitability is very strong in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). . Elsewhere, life insurance performs strongly in general, as do the majority of p/c operations if allowance is made for the 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. cycle. -- Financial leverage remains consistent with the ratings, after adjusting for debt used to finance AGF's mortgage program. Following the Pimco acquisition, financial leverage for the consolidated Allianz Group is expected to remain below 15%, and fixed-charge coverage fixed-charge coverage The number of times that a firm's operating income exceeds its fixed payments. Fixed-charge coverage is a measure of a firm's ability to meet contractually fixed payments, with high coverage indicating significant flexibility for making will remain above 10 times. -- Allianz is implementing value-added management across the group. While this should mean that corrective action A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or is taken more promptly in areas of poor performance, it may also lead to a more aggressive level of capitalization in the longer term, both at the consolidated group level and at the level of individual operating entities. This scenario is made more likely by the group's appetite for foreign acquisitions to achieve its strategic goals. OUTLOOK: POSITIVE (Lloyd Adriatico SpA) The outlook is driven by Standard & Poor's expectation of closer integration with the company's larger and stronger Italian affiliate Riunione Adriatica de Sicurta SpA, and hence an increase in its strategic importance to the Allianz Group. OUTLOOK: POSITIVE (LifeUSA Insurance Co. MN) The outlook reflects the expectation of the company's increasing importance to Allianz's U.S. life operations, as this recent acquisition is gradually integrated more closely into the group. OUTLOOK: NEGATIVE (Elvia Lebensversicherungs AG/Elvia Schweizerische Vers.-Gesell.) The outlook on the Elvia companies reflects the prospect of considerable management resources being absorbed by the protracted pro·tract tr.v. pro·tract·ed, pro·tract·ing, pro·tracts 1. To draw out or lengthen in time; prolong: disputants who needlessly protracted the negotiations. 2. integration of Elvia with Allianz's other Swiss subsidiaries, and by Standard & Poor's concerns as to Elvia's ability to maintain market share in the face of strong competition from the three market leaders. OUTLOOK: NEGATIVE (Cornhill Insurance PLC) The outlook reflects concerns regarding Cornhill's prospective earnings in the competitive U.K. nonlife insurance market. Significantly weaker underwriting results in 1999 may mark the end of Cornhill's historically consistent outperformance relative to its peer group. OUTLOOK: STABLE (all other Allianz Group members) -- Operating performance will improve as rationalization rationalization, in psychology: see defense mechanism. of savings is achieved in a number of markets, and as value-based management prompts a more active response to problem areas. An upturn in nonlife underwriting results from 2001 will be offset by substantial tax charges in Germany, and shrinking margins from the life business as a result of lower interest rates. -- Standard & Poor's expects Allianz to acquire a significant U.S. life insurer in the next two years. Although foreign acquisitions will give the group a stronger global profile, they are also likely to dilute di·lute v. To reduce a solution or mixture in concentration, quality, strength, or purity, as by adding water. adj. Thinned or weakened by diluting. the benefit of the very strong earnings achieved in Germany. -- Capitalization will be diluted in light of the implementation of value-based management and the group's appetite for acquisitions. Nevertheless, it will remain in the triple-'A' range. -- The new asset management operation will exhibit rapid organic growth, which may be supplemented by acquisitions. Allianz Group operates in lines of insurance that may be subject to liability claims related to the Year 2000 computer problem. At the present time, this risk is not explicitly factored into Allianz's rating due to uncertainties about the frequency, severity, and legal treatment of claims that may be filed. It is possible that costs related to Year 2000 liability could affect Allianz's earnings over the next few years, Standard & Poor's said. -- CreditWire RATINGS AFFIRMED; OUTLOOK STABLE HOLDING COMPANY & GROUP REINSURER Allianz AG Counterparty credit rating AAA/A-1+ Insurer financial strength rating AAA Commercial paper A-1+ GERMANY Allianz Versicherungs AG Counterparty credit rating AAA Insurer financial strength rating AAA Frankfurter Vers. AG Counterparty credit rating AAA Insurer financial strength rating AAA Bayerische Versicherungsbank AG Counterparty credit rating AAA Insurer financial strength rating AAA Vereinte Versicherung AG Counterparty credit rating AAA Insurer financial strength rating AAA Allianz Lebensversicherungs AG Counterparty credit rating AAA Insurer financial strength rating AAA Vereinte Lebensversicherung AG Counterparty credit rating AAA Insurer financial strength rating AAA Vereinte Krankenversicherung AG Counterparty credit rating AAA Insurer financial strength rating AAA FRANCE AGF - Assurances Generales de France Short-term counterparty credit rating A-1+ Commercial paper A-1+ AGF - Assurances Generales de France Vie Counterparty credit rating AAA Insurer financial strength rating AAA AGF - Assurances Generales de France Incendie Accidents Reassurances Transport Counterparty credit rating AAA Insurer financial strength rating AAA AGF - Assurance Generales de France Marine Aviation 7 Transport (AGF-MAT) Insurer financial strength rating AAA Allianz Assurances S.A. Counterparty credit rating AAA Insurer financial strength rating AAA AGF - Assurances Generales de France CASH (SNC)) Commercial paper(a) A-1+ Preservatrice Fonciere T.I.A.R.D. Counterparty credit rating AAA Insurer financial strength rating AAA ITALY R.A.S - Riunione Adriatica di Sicurta SpA Counterparty credit rating AAA Insurer financial strength rating AAA AUSTRIA Allianz Elementar Versicherungs - AG Counterparty credit rating AAA Insurer financial strength rating AAA Allianz Elementar Lebensversicherungs AG Counterparty credit rating AAA Insurer financial strength rating AAA SWITZERLAND Allianz Risk Transfer Counterparty credit rating AA Insurer financial strength rating AA AMERICAS Fireman's Fund Insurance Co. Counterparty credit rating AAA Insurer financial strength rating AAA Fireman's Fund County Mutual Insurance Co. Insurer financial strength rating AAA Fireman's Fund Insurance Co. of Georgia Insurer financial strength rating AAA Fireman's Fund Insurance Co. of Hawaii Inc. Insurer financial strength rating AAA Fireman's Fund Insurance Co. of Ohio Counterparty credit rating AAA Insurer financial strength rating AAA Fireman's Fund Insurance Co. of Louisiana Insurer financial strength rating AAA Fireman's Fund Insurance Co. of Missouri Insurer financial strength rating AAA Fireman's Fund Insurance Co. of Wisconsin Counterparty credit rating AAA Insurer financial strength rating AAA American Automobile Insurance Co. Counterparty credit rating AAA Insurer financial strength rating AAA Associated Indemnity Corp. Counterparty credit rating AAA Insurer financial strength rating AAA American Standard Lloyds Insurance Co. Insurer financial strength rating AAA National Surety Corp. Counterparty credit rating AAA Insurer financial strength rating AAA American Insurance Co. Counterparty credit rating AAA Insurer financial strength rating AAA Allianz Insurance Co. Counterparty credit rating AAA Insurer financial strength rating AAA Allianz Underwriters Insurance Co. Counterparty credit rating AAA Insurer financial strength rating AAA Jefferson Insurance Co. of NY Counterparty credit rating A+ Insurer financial strength rating A+ Monticello Insurance Co. Counterparty credit rating A+ Insurer financial strength rating A+ Allianz Life Insurance Co. North America Counterparty credit rating AAA Insurer financial strength rating AAA Preferred Life Insurance Co. of NY Counterparty credit rating AAA Insurer financial strength rating AAA Allianz of America, Inc. Short-term counterparty credit rating A-1+ Commercial paper A-1+ Allianz Ins. Co. of Canada Counterparty credit rating AA- Insurer financial strength rating AA- Trafalgar Insurance Co.. Counterparty credit rating AA- Insurer financial strength rating AA- RATINGS AFFIRMED; OUTLOOKS REVISED TO POSITIVE FROM STABLE ITALY Lloyd Adriatico SpA Counterparty credit ratings A- Insurer financial strength rating A- RATINGS AFFIRMED; OUTLOOKS REVISED TO NEGATIVE FROM STABLE U.K. Cornhill Insurance PLC Counterparty credit rating AA Insurer financial strength rating AA SWITZERLAND Elvia Lebensversicherungs AG Counterparty credit rating AA- Insurer financial strength rating AA- Elvia Schweizerische Vers.-Gesell. Counterparty credit rating AA- Insurer financial strength rating AA- RATINGS AFFIRMED: OUTLOOK POSITIVE GERMANY Hermes Kreditversicherungs - AG Counterparty credit rating AA-/A-1+ Insurer financial strength rating AA- AMERICAS LifeUSA Insurance Co. (MN)) Counterparty credit rating A+ Insurer financial strength rating A+ (a)Guaranteed by AGF - Assurances Generales de France Copyright 1999, Standard & Poor's Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. |
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