(The following statement was released by the rating agency)
FRANKFURT/LONDON, September 12 (Fitch) Fitch Ratings has
affirmed German life
insurers R+V Lebensversicherung AG's (R+V Life), R+V
(R+V Mutual) and Condor Lebensversicherungs-AG's (Condor)
Strength (IFS) Ratings at 'AA'. The Outlooks are Stable.
KEY RATING DRIVERS
Fitch views R+V Life, R+V Mutual and Condor as 'core' to the R+V
and the ratings are therefore aligned with the agency's view of
the R+V group as
a whole, in line with our insurance group rating methodology.
The R+V group's holding company is R+V Versicherung AG, which is
92%-owned by DZ
Bank AG (Issuer Default Rating (IDR) AA-/Stable). DZ Bank AG is
the central bank
within Germany's cooperative banking group Genossenschaftliche
(GFG; AA-/Stable). Fitch takes a positive view of the ownership
of the R+V group
by DZ Bank AG/GFG in that the bank would support the insurance
necessary. This has been reflected in a two-notch rating uplift
agency's standalone assessment for the R+V group's implied IDR.
The ratings are supported by the R+V group's solid
capitalisation, strong market
position, and robust operating performance. Offsetting these
factors is the R+V group's significant duration gap in the
German life business
and a geographical focus on Germany.
Fitch assesses the group's capitalisation as 'very strong',
which we expect to
be maintained in 2016. Under Fitch's Prism Factor Based Model
(Prism FBM), the
R+V group scored 'very strong' based on end-2015 financials.
This was supported
by the group's regulatory solvency I margin of 185% at end-2015.
For 2016 Fitch expects the R+V group to maintain the strong
performance it reported in 2015. However, the R+V group's
reported a net combined ratio of 101.3% (2014: 100.2%) for 2015,
weaker than the German market average of 95% (2014: 94.1%).
Fitch expects that
the R+V group's net combined ratio will remain weaker than the
average for 2016.
The R+V group is one of the top five primary insurance groups in
2015, the group strengthened its market position as gross
written premiums (GWP)
for German primary insurance increased 5.7% in 2015 while the
reported GWP growth of only 0.2%.
Fitch assesses the R+V group's asset/liability and liquidity
management at 'BBB'
(ALM score). Compared with the group's rating, the weak ALM
score is primarily
driven by the R+V group's large duration mismatch for the German
Fitch believes that the R+V group's asset duration is below the
of German life insurers.
R+V Life is the R+V group's main operating life insurer in
Germany, while Condor
serves as a specialist for independent financial advisors in
individual life and
R+V Mutual is a specialist for mid- and high-net worth clients
and a pension
provider. Measured by GWP in 2015, R+V Life is Germany's
Key rating triggers for a downgrade include a downgrade of
GFG/DZ Bank AG's
ratings, a change in Fitch's view of the R+V group's strategic
GFG/DZ Bank AG or a change in Fitch's view of the entities' core
the R+V group.
Key rating triggers for an upgrade include an upgrade of GFG/DZ
ratings, and the entities maintaining their strategic importance
for the R+V
group and GFG/DZ Bank AG.
Dr Christoph Schmitt
+49 69 768076 121
Fitch Deutschland GmbH
Neue Mainzer Strasse 46-50,
D-60311 Frankfurt am Main
Dr Stephan Kalb
+49 69 768076 118
+44 20 3530 1394
Media Relations: Athos Larkou, London, Tel: +44 203 530 1549,
Additional information is available on www.fitchratings.com.
Insurance Rating Methodology (pub. 17 May 2016)
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