S&P Rates Royal Nederland Group 'AA-'; Outlook Stable.Business Editors LONDON--(BUSINESS WIRE)--May 31, 2000 (Standard & Poor's CreditWire) Standard & Poor's today assigned its double-'A'-minus long-term counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit and insurer financial strength ratings to Royal Nederland Levenverzekering N.V., Royal Nederland Schadeverzekering N.V., and London & Lancashire Verzekering Maatschappij N.V. The companies are core members of the Royal Nederland group. The outlook is stable. The rating reflects the companies' strategic importance to France-based 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 (AA+/Stable/--) and its parent Allianz AG (AAA/Stable/A-1+), 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. , and strong market position in the motor and corporate segment. Offsetting these strengths, the Royal Nederland group has a modest business position in the highly competitive life market, combined with high expense levels and exposure to the more volatile industrial and motor business. The companies within the Royal Nederland group are wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of the AGF group. AGF is a 51%-owned subsidiary of the Allianz group, and is responsible for developing business in the Benelux countries. Major rating factors: -- Strategic importance to the Allianz group. Allianz aims to become at least number five in the markets in which it operates. Although this target has not been achieved so far in the Netherlands, the Netherlands, The officially Kingdom of The Netherlands byname Holland Country, northwestern Europe. Area: 16,034 sq mi (41,528 sq km). Population (2005 est.): 16,300,000. Capital: Amsterdam. Seat of government: The Hague. Most of the people are Dutch. Royal Nederland group contributes substantially to AGF's profits, and is an important part of Allianz's global network, supporting its industrial business clients. -- Extremely strong capitalization. The group demonstrated extremely strong risk-based capitalization. The solvency margin for Royal Nederland Levenverzekering at year-end 1999 was 260% of the required coverage. The nonlife solvency margin was also strong at 89.1% of 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. . In line with the parent company's strategy, the Royal Nederland group aims to maintain risk-adjusted capitalization in the double-'A' range. Excess capital could be used to finance expansion. -- Strong position in the Dutch corporate and motor market. Through the merger with Allianz Nederland N.V. in 1999, Royal Nederland Schadeverzekering acquired a substantial industrial portfolio and has become the leading Dutch insurer for large corporate clients. The company's access to the vast Allianz network and capacity gives Royal Nederland Schadeverzekering a competitive advantage in the global business segment. -- London & Lancashire Verzekering has an exclusive agreement with ANWB ANWB Algemene Nederlandse Wielrijders Bond (Dutch automobile association) , the Dutch Automobile Association Automobile Association may refer to:
-- Together with the strong position of Royal Nederland Schadeverzekering in the corporate motor sector (business fleets and employee cars), the group is the third-largest motor insurance provider in the Dutch market. Offsetting these strengths is the group's exposure to these highly competitive and volatile corporate and motor market segments. -- Modest business position in the Dutch life market. Large players such as ING GROEP N.V. (AA-/Stable/A-1+), Achmea N.V. (A/Stable/A-1), and AEGON N.V. (AA/Negative/A-1+) dominate the Dutch life market. Although Royal Nederland Levenverzekering offers very flexible and profitable products (mainly universal life) it may be difficult for the company to sustain its market position (number 11), as other players introduce universal products. -- High expense levels, resulting from the relative immaturity im·ma·ture adj. 1. Not fully grown or developed. See Synonyms at young. 2. Marked by or suggesting a lack of normal maturity: silly, immature behavior. of the business (when compared with peers), exacerbate this challenge. Further uncertainty stems from the Dutch government's plans to change the taxation system relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the deductibility of life premiums and the tax treatment of private assets. OUTLOOK: STABLE Capital will remain strong, but may be 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 the double-'A' range in the medium term. Excess capital may be used for acquisitions in the Netherlands. The group should be able to maintain its strong position in the corporate business and motor market. Life sales will be affected by the Dutch government's tax plans, and strong competition will increase pressure on Royal Nederland Levenverzekering's market position, Standard & Poor's said. --CreditWire Copyright 2000, 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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