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AM Best Affirms Credit Ratings of N.V. Univé Her

May 22, 2019


AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of N.V. Univé Her (Univé Her) (Netherlands), a wholly owned subsidiary of Coöperatie Univé U.A. (Univé Group), a mutual insurance group domiciled in the Netherlands. The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect Univé Her’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also consider Univé Her’s strategic importance to and integration within the Univé Group (the group) as the group’s reinsurance vehicle, with the company benefiting from rating enhancement as a result.

Univé Her’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which remained at the strongest level as at year-end 2018, as measured by Best’s Capital Adequacy Ratio (BCAR), despite the adverse impact of the year’s windstorm losses. Given the company’s exposure to catastrophe losses, prospective risk-adjusted capitalisation is susceptible to volatility. Nevertheless, AM Best expects risk-adjusted capitalisation to remain at the strongest level over the medium term, supported by Univé Her’s rigorous capital management policy and its robust retrocession programme. An offsetting factor is the company’s dependence on retrocession to manage its natural catastrophe exposure.

Univé Her’s underwriting results are solid, having generated a five-year (2014-2018) average combined ratio (COR) of 60.8%, and overall operating earnings are supplemented by modest investment returns reflective of the company’s conservative investment portfolio. In 2018, Univé Her reported an operating loss of approximately EUR 0.8 million, underpinned by an elevated COR of approximately 104% driven by natural catastrophe losses. In addition, unrealised losses on the company’s equity portfolio yielded a negative investment result. Assuming normalised catastrophe experience, AM Best expects that the company will deliver robust operating profits for year-end 2019.

Given its distinctive role as the group’s main reinsurer, Univé Her benefits from its exclusive access to the reinsurance business ceded by the Univé mutuals and N.V. Univé Schade. Univé Her is a monoline reinsurer; the company solely retains the property excess of loss reinsurance risk ceded by the regional mutuals. All other product lines are retroceded to the external reinsurance market. An offsetting factor to the business profile assessment is the company’s limited geographical diversification, with its portfolio concentrated exclusively within the Netherlands.

This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases .

AM 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 © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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