A.M. Best has assigned a financial strength rating of “A+ (Superior)” and an issuer credit rating of “aa-” to Allianz Risk Transfer Bermuda (ART Bermuda). The outlook assigned to both ratings is stable.
The ratings reflect the company’s strategic importance to Allianz Risk Transfer AG (ART), whose ultimate parent is German insurer Allianz SE.
According to the agency, the ratings reflect the company’s “moderate level” of risk-adjusted capitalisation and the expectation of good operating performance.
ART Bermuda’s operating licenses in Bermuda helps facilitate the strategy of ART, particularly with regards to insurance-linked markets (ILM) and reinsurance solutions business lines.
Its management team and operating systems are highly integrated into those of its larger parent, and the company’s activities benefit from a comprehensive financial guarantee from ART.
A.M. Best stated: “ART Bermuda’s risk-adjusted capitalisation is expected to improve over the next two years as its higher risk investments run off and proceeds are reinvested into traditional asset classes.”
“Underwriting performance improved to a good level in 2014 following the adjustment of the commission structure for the company’s ILM business.”
Domiciled in Bermuda, ART Bermuda is a key operating subsidiary of ART. It is active in markets for insurance-linked securities, reinsurance solutions, corporate solutions and weather-related risks. It also manages structured investments that are in run-off and a portfolio of third-party natural catastrophe bonds.
ART itself is a core operating unit of Allianz Global Corporate & Specialty SE, which globally manages the corporate and specialty business lines of Allianz SE.
The agency confirmed that any changes in the creditworthiness of Allianz SE could have a corresponding positive or negative impact on the ratings of ART Bermuda.
In addition, a weakening of risk-adjusted capitalisation, failure to maintain positive operating results, or a perceived reduction in the level of support offered to ART Bermuda from its parent company would add negative pressure to the ratings.
