A.M. Best Upgrades Issuer Credit Rating of Allianz Risk Transfer AG

  A.M. Best Upgrades Issuer Credit Rating of Allianz Risk Transfer AG

Business Wire

LONDON -- December 14, 2012

A.M. Best Europe – Rating Services Limited has affirmed the financial strength
rating of A (Excellent) and upgraded the issuer credit rating to “a+” from “a”
of Allianz Risk Transfer AG (ART) (Switzerland). The outlook assigned to both
ratings is stable.

The upgrade reflects ART’s strong risk-adjusted capitalisation and strategic
importance to its intermediate parent, Allianz Global Corporate & Specialty AG
(AGCS AG) and in turn to its ultimate parent Allianz Societas Europaea
(Allianz SE) (Germany) as the group's alternative risk transfer unit.

ART’s consolidated risk-adjusted capitalisation increased in 2011,
precipitated by reduced underwriting risk following the termination of a large
reinsurance contract, as well as increased retained earnings. Allowing for the
dividend payment of CHF 178.0 million to AGCS AG, capitalisation is expected
to remain strong in 2012 and into 2013. The company’s traditional portfolio is
protected by an extensive reinsurance programme which encompasses a stop loss
and an excess of loss agreement between ART and its intermediate parent, AGCS.

Given the nature of some of the business underwritten, underwriting results
are subject to some volatility. Nevertheless, this is mitigated by the
company's solid risk management framework and extensive reinsurance programme
on its traditional portfolio and low retention on its alternative risk
transfer business.

The company maintains a good business profile as the dedicated corporate risk
transfer unit of the Allianz group. ART benefits from the implicit support of
its ultimate parent, Allianz SE. The company is well integrated into its
immediate parent, AGCS AG, in terms of business strategy and management. The
ratings reflect both implicit support in the form of business integration as
well as explicit support from AGCS AG in the form of reinsurance, including
stop loss reinsurance.

A positive change in the rating of Allianz SE could lead to positive rating
actions on ART.

Negative rating movements could occur if there were a material fall in the
risk adjusted capitalisation and/or operating performance of ART. Furthermore,
any deterioration in group support/weakening of the company’s strategic
importance to its immediate and in turn ultimate parent, Allianz SE, could
place downwards pressure on the ratings of ART. Any negative rating actions on
Allianz SE could result in negative rating actions on ART.

The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilised include: “Alternative Risk Transfer”;
“Catastrophe Analysis in A.M. Best Ratings”; “Risk Management and the Rating
Process for Insurance Companies”; “Rating Members of Insurance Groups”;
“Understanding BCAR for Property/Casualty Insurers”; and “Understanding
Universal BCAR”. Best’s Credit Rating Methodology can be found at

In accordance with Regulation (EC) No. 1060/2009, the following is a link to
required disclosures: A.M. Best Europe - Rating Services Limited Supplementary

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best
Company. Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more information,
visit www.ambest.com.

       Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


Grace Panti-Amoa, +(44) 20 7397 0331
Financial Analyst
Sam Dobbyn, +(44) 20 7397 0264
Associate Director, Analytics
Rachelle Morrow, +1-908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, +1-908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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