A.M. Best Places Credit Ratings of Certain Subsidiaries of HDI Haftpflichtverband der Deutschen Industrie V.a.G. Under Review

LONDON–(BUSINESS WIRE)–A.M. Best has placed under review with positive implications the
Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” of Talanx AG
(Germany), the intermediate holding company of HDI Haftpflichtverband
der Deutschen Industrie V.a.G., and the Long-Term Issue Credit Rating
(Long-Term IR) of a debt instrument issued by Talanx Finanz (Luxembourg)
S.A., and guaranteed by Talanx AG. Concurrently, A.M. Best has placed
under review with developing implications the Financial Strength Rating
of A (Excellent) and the Long-Term ICR of “a+” of Talanx Reinsurance
(Ireland) SE. (See below for details on the Long-Term IR.)

The Credit Rating (rating) actions follow the announcement that Talanx
AG, in pursuance of greater efficiency for the group’s internal
reinsurance structure, recently applied for a reinsurance license to
start writing business in 2019.

As part of the group’s new target operating model, Talanx AG is expected
to become the main risk carrier for most of the internal non-life
reinsurance treaty cessions (excluding facultative) with effect from
2020 onwards. Following regulatory license approval, the company’s
status will change from the group’s non-operating holding company to an
operating holding company. The positive implications reflect A.M. Best’s
expectations that the company will broaden its revenue sources, further
improving financial flexibility that will lead to an increased ability
to service ongoing and prospective obligations.

The group’s new reinsurance structure also is expected to result in
changes for Talanx Reinsurance (Ireland) SE — the group’s subsidiary
currently acting as the intra-group non-life reinsurer. A.M. Best will
reassess the company’s strategic importance and prospective role within
the group as soon as further information is provided.

The latest rating action follows an accepted appeal from Talanx Re,
under which new information was provided that enhanced A.M. Best’s
opinion on the role of the Irish reinsurer as part of the wider group’s
strategy.

A.M. Best expects to resolve the under-review status of the ratings once
the license has been approved by the German regulator and a full
assessment of the impact of the changes has been completed.

The following Long-Term IR of “bbb+” has been placed under review with
positive implications:

Talanx Finanz (Luxembourg) S.A.—
— EUR 500 million 8.367%
subordinated fixed to floating rate notes, due 2042

This press release relates to Credit Ratings 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 see A.M. Best’s
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best’s Credit Ratings
. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view
Guide
for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Borja Cubillo, CFA
Financial Analyst
+44
20 7397 0306

borja.cubillo@ambest.com
or
Mahesh
Mistry

Senior Director, Analytics
+44 20 7397
0325

mahesh.mistry@ambest.com
or
Christopher
Sharkey

Manager, Public Relations
+1 908 439
2200, ext. 5159

christopher.sharkey@ambest.com
or
Jim
Peavy

Director, Public Relations
+1 908 439
2200, ext. 5644

james.peavy@ambest.com

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