Market Overview

A.M. Best Affirms Credit Ratings of Allianz SE and Most of Its Rated Subsidiaries

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A.M. Best has affirmed the Financial Strength Rating (FSR) of A+
(Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of
"aa" of Allianz SE (Allianz) (Germany) and most of its rated
subsidiaries. (See below for the list of the companies.) Concurrently,
A.M. Best has upgraded the Long-Term ICR to "aa" from "aa-" and affirmed
the FSR of A+ (Superior) of Euler Hermes North America Insurance Company
(Owings Mills, MD). The outlook of these Credit Ratings (ratings)
is stable.

The ratings reflect Allianz's balance sheet strength, which A.M. Best
categorises as strongest, as well as its strong operating performance,
very favourable business profile and very strong enterprise risk
management.

Allianz is one of the world's largest insurance groups, with superior
diversification by geography and business line, and leading positions in
many developed and emerging markets, offering a complete range of life
and non-life insurance products, as well as asset management services.
Its scale, strong management capabilities, dynamic strategy and strong
brand support its competitive position. Despite a significant negative
foreign exchange impact in 2017, the group grew its revenue by 3%,
boosted by strong sales in the life/health division. Notable
developments in 2017 include the acquisition of the outstanding shares
of Euler Hermes Group S.A. (Euler Hermes), a credit insurer, as well as
the formation of a joint venture with Liverpool Victoria Friendly
Society (LV=), a U.K. personal lines insurer.

A.M. Best expects Allianz's risk-adjusted capitalisation, as measured by
Best's Capital Adequacy Ratio, to be maintained at the strongest level,
supported by a prudent capital management approach. Financial leverage
and coverage ratios are supportive of the balance sheet strength
assessment and financial flexibility is considered excellent due to the
group's access to capital markets.

Allianz has a track record of strong and stable performance, supported
by its diversified earnings profile. The group produced strong results
in 2017, in spite of losses from catastrophe events in North America.
Core operating entities performed well, with the exception of a small
number where remedial actions are already underway. The group's
profitable and scalable asset management business continues to provide a
good additional source of income (approximately 22% of the group's
operating profit in 2017). Prospective earnings are expected to remain
strong over the medium term.

The Long-Term ICR upgrade for Euler Hermes North America Insurance
Company is based on the company's strategic importance to
Allianz. This follows the completion of the buy-out of its parent, Euler
Hermes, by Allianz in 2018.

The FSR of A+ (Superior) and the Long-Term ICR of "aa" have been
affirmed for Allianz SE and its following subsidiaries:

  • Allianz Global Corporate & Specialty SE
  • Allianz S.p.A
  • Allianz Risk Transfer AG
  • Allianz Risk Transfer (Bermuda) Limited
  • AWP P&C S.A.
  • Jefferson Insurance Company
  • AWP Health & Life S.A.
  • Allianz Global Risks US Insurance Company
  • Allianz Underwriters Insurance Company
  • AGCS Marine Insurance Company
  • American Automobile Insurance Company
  • National Surety Corporation
  • The American Insurance Company
  • Associated Indemnity Corporation
  • Chicago Insurance Company
  • Fireman's Fund Insurance Company
  • Fireman's Fund Indemnity Corporation
  • Fireman's Fund Insurance Company of Hawaii, Inc.
  • Interstate Fire & Casualty Company
  • Allianz Life Insurance Company of North America
  • Allianz Life Insurance Company of New York
  • Allianz Global Corporate & Specialty Resseguros Brasil S.A.

The following Long-Term IRs have been affirmed with a stable outlook:

Allianz Finance II B.V. (debt issues are guaranteed by Allianz SE)

-- "aa-" on EUR 2 billion 5.75% subordinated bonds, due 2041 
--
"a+" on EUR 800 million 5.375% perpetual subordinated bonds
-- "aa"
on EUR 750 million 3% senior unsecured bonds, due 2028 
--
"aa" on GBP 750 million 4.5% senior unsecured bonds, due 2043 
--
"aa" on EUR 1.5 billion 3.5% senior unsecured bonds, due 2022 
--
"aa" on EUR 1.5 billion 4.75% senior unsecured bonds, due 2019

Allianz SE— 
-- "a+" on EUR 1.5 billion 4.75% perpetual
subordinated bonds 
-- "a+" on CHF 500 million 3.25% perpetual
subordinated bonds 
-- "a+" on USD 1 billion 5.5% perpetual
subordinated bonds 
-- "aa-" on EUR 1.5 billion 5.625%
subordinated bonds, due 2042 
-- "a+" on EUR 1.5 billion 3.375
perpetual junior subordinated bonds

This press release relates to Credit Ratings 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 see A.M. Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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