Best, Places

A.M. Best has placed under review with positive implications the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Talanx AG (Germany), the intermediate holding company of HDI Haftpflichtverband der Deutschen Industrie V.a.G., and the Long-Term Issue Credit Rating (Long-Term IR) of a debt instrument issued by Talanx Finanz (Luxembourg) S.A., and guaranteed by Talanx AG.

07.11.2018 - 15:48:27

A.M. Best Places Credit Ratings of Certain Subsidiaries of HDI Haftpflichtverband der Deutschen Industrie V.a.G. Under Review. Concurrently, A.M. Best has placed under review with developing implications the Financial Strength Rating of A (Excellent) and the Long-Term ICR of “a+” of Talanx Reinsurance (Ireland) SE.

As part of the group’s new target operating model, Talanx AG is expected to become the main risk carrier for most of the internal non-life reinsurance treaty cessions (excluding facultative) with effect from 2020 onwards. Following regulatory license approval, the company's status will change from the group’s non-operating holding company to an operating holding company. The positive implications reflect A.M. Best’s expectations that the company will broaden its revenue sources, further improving financial flexibility that will lead to an increased ability to service ongoing and prospective obligations.

The group’s new reinsurance structure also is expected to result in changes for Talanx Reinsurance (Ireland) SE — the group’s subsidiary currently acting as the intra-group non-life reinsurer. A.M. Best will reassess the company’s strategic importance and prospective role within the group as soon as further information is provided.

The latest rating action follows an accepted appeal from Talanx Re, under which new information was provided that enhanced A.M. Best’s opinion on the role of the Irish reinsurer as part of the wider group’s strategy.

A.M. Best expects to resolve the under-review status of the ratings once the license has been approved by the German regulator and a full assessment of the impact of the changes has been completed.

The following Long-Term IR of “bbb+” has been placed under review with positive implications:

Talanx Finanz (Luxembourg) S.A.—
-- EUR 500 million 8.367% subordinated fixed to floating rate notes, due 2042

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