S&P affirms 'A' outlook stable rating UNIQA Group

S&P Global Ratings affirmed its 'A' long-term issuer credit and financial strength ratings on the core operating entities of Austria-based multiline insurance group UNIQA.

S&P also affirmed its 'A-' long-term issuer credit and financial strength ratings on UNIQA's operating holding company and highly strategic subsidiary. The outlook on all entities remains stable. S&P expects the ratings to remain the same over the next 12-24 months.

The rating agency mentioned the following remarks:

  • UNIQA is maintaining its leading position in Austria's growing health insurance sector and its strong market position in the Austrian nonlife and life insurance sectors.
  • The insurer is also expanding its franchise in Central and Eastern Europe.
  • UNIQA's capital adequacy under our risk-based capital model is extremely strong, although the group's capitalization somewhat relies on market-sensitive items.
  • We are affirming our 'A' ratings on UNIQA's core operating entities. We are also affirming our 'A-' ratings on UNIQA's operating holding company, UNIQA Insurance Group, and highly strategic subsidiary, UNIQA Versicherung AG.
  • The stable outlook reflects our expectation that UNIQA will preserve its extremely strong capital adequacy and maintain its solid competitiveness.
Upside scenario (S&P raising UNIQA rating) is possible if the insurer retains a material capital buffer at extremely strong levels while at the same time showing materially superior profitability compared with domestic and international competitors. Another improvement which could raise the rating could happen if the net income and geographic diversification of revenue materially and sustainably increase.

Downside scenario (S&P lowering UNIQA rating) could be considered if the capital would be consistently weakened below the 'AA' range, according to agency capital model, or the funding structures were to deteriorate because of a drop of fixed-charge coverage below 4x for a prolonged period, as a result of lower earnings or higher refinancing costs than in our base case.

Standard & Poor's also wrote in the report:

Our ratings on UNIQA reflect the group's strong position as the second largest insurance group in Austria, with some further expansion into CEE insurance markets. We also think the group benefits from well-established distribution capabilities and a diverse business portfolio of property/casualty, life, and health insurance products. This has allowed UNIQA to retain resilient operating performance despite the ongoing low interest rate environment. We expect UNIQA will continue to focus on prudent expansion of nonlife and health insurance with further gradual improvement in underwriting performance over 2019-2020.

Source: S&P Global

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