AM Best Affirms Credit Ratings of Solunion Seguros, Compañía Internacional de Seguros y Reaseguros S.A.

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a" (Excellent) of Solunion Seguros, Compañía Internacional de Seguros y Reaseguros S.A. (Solunion) (Spain). The outlook of these Credit Ratings (ratings) is stable.

Solunion is the operating holding company of the Solunion group of companies, a 50-50 joint venture between the MAPFRE group and Allianz Trade. Allianz SE is the ultimate parent of Allianz Trade.

The ratings reflect Solunion's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also consider the strategic and operational support Solunion receives from its joint shareholders, including significant reinsurance support in the form of quota share arrangements and excess of loss protection.

Solunion's balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which remained at the strongest level as at year-end 2023, as measured by Best's Capital Adequacy Ratio (BCAR). The balance sheet strength assessment is also supported by Solunion's prudent reserving approach and conservative investment strategy. Solunion is highly dependent on reinsurance, but the associated risk is considered limited, as reinsurance arrangements are solely with the company's shareholders.

Solunion has achieved positive net results consistently over recent years, reporting a return on equity of 9.0% as at year-end 2023, as calculated by AM Best. In 2023, Solunion reported a profit before tax of EUR 16.7 million driven by solid technical profits. Solunion has continued to report good results as at the end of June 2024. An offsetting factor is the uncertainty around the sustainability of the trade credit results in light of competitive and challenging market and economic conditions. However, AM Best notes the company's ability to take prompt risk-mitigating actions on non-performing business when required.

Solunion has a growing position as a trade credit and surety specialist in its selected operating markets. Although the portfolio is concentrated in Spain, Solunion's expansion in Latin America provides increasing geographic diversification. Positive business profile factors include the company's ability to leverage the trade credit expertise and capabilities of Allianz Trade, whilst accessing MAPFRE's widespread and well-established distribution channels in its target markets.

This press release relates to Credit Ratings that have been published on AM 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 AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings Assessments

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com

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Juan A. Villaescusa Prades
Financial Analyst
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Dr. Mathilde Jakobsen
Senior Director, Analytics
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Christopher Sharkey
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Al Slavin
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