S&P Affirms Allianz Group Ratings, Revises Outlook to Negative

Standard & Poor’s affirmed all its ratings on Germany’s Allianz group, including its double-‘A’-plus long-term counterparty credit and insurer financial strength ratings, and its ‘A-1’-plus short-term ratings, but has revised its outlook to negative from stable.

“This is due mainly to the overall weakened operating performance of the group,” S&P explained. “The outlook revision reflects Allianz’s weakened risk profile and disappointing earnings performance following its acquisition of Dresdner Bank AG (Dresdner; AA-/Negative/A-1+) in 2001, uncertainty about the adequacy of the bank’s restructuring measures, and the early stage of integration and realized synergies.”

S& P said it was concerned about the challenge Allianz faces in regaining “profitability for its global industrial business and some of its major foreign subsidiaries in the U.S. and in France.”

The rating agency reiterated its overall view, however that the Allianz Group enjoys an extremely “strong global business position in insurance and financial services, and its extremely strong — although weakened — capitalization. In addition, the Dresdner acquisition has boosted Allianz’s position in asset management and retail funds, ranking it among the top five investment managers globally.”

The revision to a negative outlook reflects more the extreme events that occurred last year, as well as the fall in equity values. s&P acknowledged that Allianz certainly isn’t the only insurer to be so affected.