A.M. Best Affirms Ratings of Delvag Luftfahrtversicherungs-AG and Its Subsidiary

LONDON--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit ratings of “a” of Delvag Luftfahrtversicherungs-AG (Delvag) and its subsidiary, Delvag Rueckversicherungs-AG (Delvag Rueck) (both domiciled in Germany). The outlook for all ratings remains stable.

The ratings reflect Delvag’s strong risk-adjusted capitalisation and solid operating performance. The ratings also take into consideration Delvag’s role as the insurance captive of Deutsche Lufthansa-AG (Lufthansa), its ultimate parent.

The ratings of Delvag Rueck reflect the reinsurer’s strategic importance and its integration with immediate parent, Delvag, in terms of business strategy and management, as well as the profit and loss absorption agreement between the two companies.

Prospectively, Delvag’s risk-adjusted capitalisation is expected to remain strong. A profit and loss absorption agreement with Lufthansa provides balance sheet protection but limits Delvag’s accumulation of earnings. The insurer remains heavily dependent on reinsurance to protect the Lufthansa fleet business; however, the associated credit risk is mitigated through the use of a financially strong and diverse reinsurance panel. Delvag Rueck’s risk-adjusted capitalisation remains good, strengthened by its equalisation reserve and silent net reserves.

Delvag reported a robust technical profit of EUR 8.7 million in 2014 (2013: EUR 7.3 million), which equated to a combined ratio of 70% (2013: 71%). In 2014, Delvag Rueck reported a pre-tax profit of about EUR 0.8 million (2013: loss of EUR 0.01 million).

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This press release relates to rating(s) 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150813005902/en/

A.M. Best
Konstantin Langowski, +(44) 20 7397 0318
Financial Analyst
[email protected]
or
Catherine Thomas, +(44) 20 7397 0281
Director, Analytics
[email protected]
or
Christopher Sharkey, +(1) 908-439-2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, +(1) 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best

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