S&P Affirms Allianz (Mexico) ‘A-‘ Ratings

February 3, 2005

Standard & Poor’s Ratings Services announced that it has affirmed it’s ‘A-‘ counterparty and financial strength ratings assigned to Allianz Mexico Compañía de Seguros S.A. (AZMX). S&P said it has also “affirmed its ‘mxAAA’ counterparty and financial strength Mexican national scale ratings on the company.”

“The ratings on AZMX reflect the strategic fit with its holding company, Allianz of America (AZOA),” S&P said. “Improving trends in operating performance and earnings generation capacity and superior capital strength support the rating level,” noted S&P credit analyst Claudia Sanchez.

S&P also indicated that it “considers AZMX strategically important to AZOA because of the following factors:
— AZMX operates in lines that fit the overall long-term insurance strategy.
— The business plan focuses on servicing commercial industrial businesses to large multinationals already covered by the Allianz group.
— The Allianz brand has been completely integrated into AZMX, leveraging on the parent’s name and recognizing the strong position of the Allianz brand globally.
— It is operated on a stand-alone basis as a separate entity for legal and regulatory purposes.
— The business structure of the company is similar to the operations of the parent company, where products are offered to commercial and personal lines.
— Reporting is fully integrated into AZOA systems and follows the parent’s guidelines, incorporating its policy for every business segment. Decisions regarding investments are made at the AZOA level. Senior group management shows a strong commitment to the subsidiary.”

S&P concluded that it expects AZMX to “maintain a strong presence among second-tier insurers, especially because of its ability to underwrite large industrial risks. The potential of the company to maintain adequate growth rates is maintained by its capacity to develop new business relationships offering a wider range of products. We expect that the positive trends observed in operating performance and capitalization will be maintained.”

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