A.M. Best Affirms Ratings of Euler Hermes North American Insurance Company
OLDWICK, N.J. -- July 10, 2013
A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and
issuer credit ratings of “aa-” of Euler Hermes North American Insurance
Company (Euler Hermes NA) (Owings Mills, MD). The outlook for both ratings is
The ratings reflect Euler Hermes NA’s strong risk-adjusted capitalization,
leading market position as the largest trade accounts receivable insurer in
the United States and its strong risk management practices, which mitigated
the effects of the financial crisis on the company’s operating results. The
ratings also reflect the support provided by Euler Hermes NA’s intermediate
parent, Euler Hermes S.A. (France), and the organization’s ultimate parent,
Allianz Societas Europaea (Allianz SE) (Germany). This support includes
reinsurance protection, integration of infrastructure, enhanced marketing
capabilities and financial flexibility.
These positive rating factors are offset by the downturn in Euler Hermes NA’s
operating results in recent years, particularly 2008, 2009 and 2011,
reflecting increases in losses, defaults and bankruptcies due to the global
financial crisis. In addition, adverse reserve development was experienced in
those accident years; however, loss reserve development trends have
significantly improved recently. Furthermore, Euler Hermes NA’s surplus growth
has been limited due to the amount of stockholder dividends paid over the last
Future positive rating actions may result if Euler Hermes NA outperforms its
peers over an extended period. However, negative rating actions could result
if the company’s operating performance falls markedly short of expectations,
if there is a considerable deterioration in risk-adjusted capitalization or if
there is a reduction in the company’s strategic importance to Allianz SE.
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
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.
A.M. Best Co.
Senior Financial Analyst
908-439-2200, ext. 5088
Managing Senior Financial Analyst
908-439-2200, ext. 5327
Senior Manager, Public Relations
908-439-2200, ext. 5378
Assistant Vice President, Public Relations
908-439-2200, ext. 5644
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