A.M. Best Affirms Ratings of N.V. Univé Her

A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of N.V. Univé Her (Univé Her) (Netherlands). The outlook for both ratings is stable.

The ratings of Univé Her reflect its excellent risk-adjusted capitalisation and its business profile as a specialist reinsurer for the Univé Group. An offsetting rating factor is the company’s volatile underwriting performance.

Univé Her’s risk-adjusted capitalisation has remained robust in recent years and it is likely to have strengthened in 2014. A.M. Best expects underwriting losses of EUR 10.7 million in 2013 to be reversed in 2014 as a result of improved claims experience and lower catastrophe-related losses. Although property insurance is Univé Her’s only line of business, the company benefits from a well-established footprint in the Netherlands, given its exclusive relationship with the companies that are members Coöperatie Univé U.A., and the source of all of its business.

The company has reported underwriting losses in three out of five years between 2009 and 2013 due to a combination of high frequency of small losses and exposure to catastrophic perils. However, stable investment returns have enabled Univé Her to generate positive operating results during the four years prior to 2013.

Positive rating actions could occur over the long term if Univé Her is able to generate a strong and stable underwriting performance whilst maintaining risk-adjusted capitalization at an excellent level.

Negative rating actions could occur if operating performance were to deteriorate to a level that does not meet A.M. Best’s expectations. In addition, downward rating pressure could arise if the dividend payments to Coöperatie Univé U.A., significantly impact Univé Her’s balance sheet strength.

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.

Key insurance criteria reports utilised:

• A.M. Best's Perspective on Operating Leverage

• Catastrophe Analysis in A.M. Best Ratings

• Evaluating Non-Insurance Ultimate Parents

• Rating Members of Insurance Groups

• Risk Management and the Rating Process for Insurance Companies

• Understanding Universal BCAR

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 press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

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