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A.M. Best Affirms Credit Ratings of N.V. Univé Her
[June 08, 2018]

A.M. Best Affirms Credit Ratings of N.V. Univé Her

A.M. 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 A.M. Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also factor in the strategic importance of Univé Her to the Univé Group as the group's reinsurance vehicle, with the company benefiting from rating enhancement as a result.

Univé Her's risk-adjusted capitalisation remains at the strongest level, although the company's exposure to catastrophe losses has the potential to introduce volatility, which is viewed as an offsetting element to the balance sheet strength assessment. A.M. Best expects Univé Her's capital position to remain at the strongest level over the next few years, supported by good internal capital generation with a conservative dividend policy. A.M. Best further considers that the well-defined capital allocation policy of Univé Group, established in 2015 as part of the implementation of Solvency II, strengthens capital governance throughout the group.

Univé Her's adequate operating performance is underpinned by solid technical profitability, evidenced by a five-year (2013-2017) average combined ratio of 77.1%. However, the nature of business underwritten, primarily property catastrophe business, has historically introduced volatility in results. Invetment income has provided a stable, albeit relatively modest, source of earnings, with a five-year (2013-2017) average return of 2.2%, reflective of the company's low risk and very liquid investment portfolio.

Univé Her's business profile benefits from its unique role as the main reinsurer for the Univé mutuals, which have a well-established footprint in the Netherlands and use Univé Her as their sole property risk reinsurer. In 2017, Univé Her started to reinsure various product lines from N.V. Univé Schade, a sister company, without retaining any of them, effectively enabling it to leverage on its bargaining power to buy retrocession protection for the group. While this has increased credit risk for Univé Her, this has been mitigated by a retrocession panel of high credit quality.

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 the world's oldest and most authoritative insurance rating and information source. For more information, visit

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

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