A.M. Best Affirms Ratings of AGA International SA and Its Subsidiary Business Wire LONDON -- April 25, 2013 A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of A (Excellent) and issuer credit ratings of “a+” of AGA International SA (AGAI SA) (France) and its subsidiary, Jefferson Insurance Company (Jefferson) (headquartered in Richmond, Virginia, USA). The outlook for all ratings remains stable. The ratings reflect AGAI SA’s good risk-adjusted capitalisation, continued good operating performance and excellent business profile as a leading worldwide travel insurance and assistance provider. The ratings also take into consideration the implicit support of AGAI SA’s ultimate parent, Allianz SE (Allianz). The ratings of Jefferson reflect enhancement due to the explicit support it receives from AGAI SA in the form of an 80% quota share reinsurance treaty. AGAI SA is expected to maintain good stand-alone risk-adjusted capitalisation in 2013, supported by retention of profits in recent years and assisted by the completion of a scheme to restructure some of its subsidiaries as branches. The company’s risk-adjusted capitalisation also benefits from the low underwriting volatility, as demonstrated by a stable loss ratio, inherent in its specialist lines of business. In addition, consistent with the short-tail nature of AGAI SA’s insurance liabilities, its investment portfolio is predominantly cash and highly liquid investment grade bonds. AGAI SA continues to achieve strong operating performances in difficult market conditions. In 2011, the company reported an operating profit before tax of EUR 59.9 million, in spite of claims arising from the Chilean volcanic ash clouds and Hurricane Irene, with a good investment return of EUR 42.5 million contributing to this result. The combined ratio of 96.5% in 2011 was similar to that achieved in 2010. With a modest increase in pre-tax earnings expected to be reported for 2012, a marginal improvement in the combined ratio for 2012 is likely, despite significant losses from Superstorm Sandy. The combined ratio takes into account high acquisition expenses for distribution of AGAI SA’s products through large business partners. AGAI SA’s main lines of business are travel insurance and roadside assistance, areas where the company has built a strong brand and extensive expertise. World tourism continues to grow, and demand for AGAI SA’s products is likely to grow as well, particularly as economic conditions gradually improve. Positive movement in AGAI SA’s ratings is considered unlikely in the short term. Negative movement in the ratings could result from a significant deterioration in operating performance, erosion of risk-adjusted capitalisation or a reduction in support from Allianz. 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. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure. A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. 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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED. Contact: A.M. Best Co. David Drummond Senior Financial Analyst +44 207 397 0327 firstname.lastname@example.org or Carlos Wong-Fupuy Senior Director, Analytics +44 207 397 0287 email@example.com or Rachelle Morrow Senior Manager, Public Relations +(1) 908 439 2200, ext. 5378 firstname.lastname@example.org or Jim Peavy Assistant Vice President, Public Relations +(1) 908 439 2200, ext. 5644 email@example.com
A.M. Best Affirms Ratings of AGA International SA and Its Subsidiary
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