LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of N.V. Univé Her (Univé Her) (Netherlands). The outlook for both ratings remains stable.
The ratings reflect Univé Her’s excellent risk-adjusted capitalisation and good business profile as a specialist reinsurer within its domestic market. Offsetting these positive rating factors is the company’s volatile operating performance which is in part linked to its concentration in one geographic market and line of business.
In 2012, OVM Univé Stormher u.a. - a former affiliate specialised in writing the group’s catastrophe business - merged into Univé Her. The acquisition of the catastrophe excess of loss portfolio from OVM Univé Stormher u.a. has increased the volatility in the company’s technical results. In 2013, Univé Her reported an underwriting loss of EUR 10.7 million (EUR 3.9 million profit for 2012) following unusually high frequency of fire claims and one large natural catastrophe. These losses were offset by releases from the company’s catastrophe reserve, which operates like an equalisation reserve, allowing Univé Her to post a profit after tax of EUR 1 million for the full year. Despite the decrease in the catastrophe reserve, the company’s overall risk-adjusted capitalisation remains excellent.
Univé Her maintains a specialist business profile as the sole property reinsurer for the 16 Univé property mutuals, which are members of the parent company Coöperatie Univé U.A. Although both geographical and business line diversification remain limited, Univé Her benefits from a very loyal and stable customer base. The company possesses extensive knowledge of its customers’ insurance needs and is able to offer technical support and competitive pricing.
Upward rating movements at this point are unlikely. Downward rating movements could be triggered by a material reduction in Univé Her's risk-adjusted capitalisation as a result of further large catastrophe losses.
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.
This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which 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.
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