A.M. Best Revises Outlook to Positive for Issuer Credit Rating of HDI-Gerling America Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has revised the outlook of the issuer credit rating (ICR) to positive from stable and affirmed the financial strength rating (FSR) of A (Excellent) and the ICR of “a” of HDI-Gerling America Insurance Company (HDI-GAIC) (Chicago, IL). The outlook for the FSR is stable.

The rating actions taken on HDI-GAIC are in lock-step with the rating actions taken by A.M. Best Europe – Rating Services Limited on its immediate parent, HDI-Gerling Welt Service AG (HG-WS), and the immediate parent of HG-WS, HDI-Gerling Industrie Versicherung AG (HDI-Gerling Industrie) (both domiciled in Germany), from whom HDI-GAIC receives substantial financial support and its ratings. The revised outlook on HG-WS and HDI-Gerling Industrie follow the successful completion of the Talanx AG’s initial public offering (IPO) on October 1, 2012 and the future financial flexibility afforded to this group, which was a concern. Talanx AG is the intermediate management holding company owned by the ultimate mutual parent company, HDI Haftpflichtverband der Deutschen Industrie V.a.G.

HG-WS and HDI-Gerling Industrie continue to provide HDI-GAIC with substantial internal financial support via significant facultative cessions and 95% quota share treaties, which have been in effect since July 1, 2008 and January 1, 2000, respectively. The ratings of HDI-GAIC also reflect additional support provided by retroactive reinsurance with HDI-Gerling Industrie, which covers any net adverse development on policies incepting prior to January 1, 2000 and the implied support of future parental commitment. HDI-GAIC principally markets global-linked commercial lines business to HDI-Gerling Industrie clients that have operations in the United States.

Given the substantial explicit support HDI-GAIC receives from HG-WS and HDI-Gerling Industrie, any upward or downward movement in the ratings of either HG-WS or HDI-Gerling Industrie would influence HDI-GAIC’s ratings.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, 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 © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best Co.
David Blades, CPCU, 908-439-2200, ext. 5422
Senior Financial Analyst
Joseph Roethel, 908-439-2200, ext. 5630
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5445
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations

Source: A.M. Best Co.