A.M. Best Affirms Ratings of AGA International SA and Its Subsidiary

  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

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

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. A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit

       Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best Co.
David Drummond
Senior Financial Analyst
+44 207 397 0327
Carlos Wong-Fupuy
Senior Director, Analytics
+44 207 397 0287
Rachelle Morrow
Senior Manager, Public Relations
+(1) 908 439 2200, ext. 5378
Jim Peavy
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
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