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A.M. Best Affirms Ratings of Allianz Life.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of "a+" of Allianz Life Insurance Company of North America (Minneapolis, MN) and its subsidiary, Allianz Life Insurance of New York (New York, NY) (collectively known as Allianz Life). The outlook for all ratings is stable.

These ratings reflect Allianz Life's strategic role to Allianz AG (Germany), its leading presence in the U.S. equity-indexed annuity market and its very strong risk management practices. A.M. Best notes the breadth of experience among Allianz Life's management team and the benefits Allianz Life receives from the knowledge and skills demonstrated by its management. Allianz Life's business profile has evolved to a highly concentrated portfolio of products in the fixed and variable annuity segment, as measured by sales growth recorded in recent years with annuity premiums representing over 90% of gross premiums written.

The recent sale of its Health Excess of Loss segment to HCC Life Insurance Company exacerbates this concentration, as its distribution offered a contrast to the distribution model used for its core life and annuity lines, marketed through independent agents and planners.

The concentration risk in the annuity segments exposes the company to interest rate and equity market risks due to the market sensitive nature of these products, which also places Allianz Life in a less favorable position when compared to more diversified insurers. Partially offsetting this risk is the strong enterprise risk management employed by Allianz Life on a global basis.

Allianz Life's risk-adjusted capital position has been stressed for several years due to surplus strain associated with the continued expansion of its annuity operations. A.M. Best notes that the recent decline of new premiums in the indexed annuity segment may reduce surplus strain, which may improve the company's risk-adjusted capital position. Despite the recent decline in premiums, Allianz Life has been consistently profitable on both a statutory and GAAP basis, posting favorable returns for several years.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit www.ambest.com/lh.

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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Publication:Business Wire
Date:Oct 10, 2006
Words:411
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