AM Best Affirms A Ratings on Triglav, Medium-Term Outlook Stable

Today, AM Best affirmed the Financial Strength Rating of “A” (Excellent) and the Long-term Issuer Credit Ratings of “a” (Excellent) of Zavarovalnica Triglav and Pozavarovalnica Triglav Re, with a stable medium-term outlook.

Following its regular annual revision, AM Best, the credit rating agency (the Agency) re-affirmed the Financial Strength Rating of “A” (Excellent) and the Long-term Issuer Credit Ratings of “a” (Excellent) for Zavarovalnica Triglav and Pozavarovalnica Triglav Re. The Agency noted that all individual elements of the ratings are at the same level as last year. Both of these ratings have a stable medium-term outlook.

Starting off with the balance sheet, the Agency assessed Triglav’s balance sheet as very strong and its operating performance as strong. The impact of both the business profile and the state’s majority holding on the Company’s credit rating was assessed as neutral. The Agency considers Triglav’s enterprise risk management to be developed and appropriate for the Company’s risk profile and operational scope. Furthermore, in once again affirming the high rating of Pozavarovalnica Tiglav Re, AM Best factored in its strategic importance to the Triglav Group, combined with its strong integration into the Group.

Furthermore, Triglav’s strong balance sheet is underpinned by its risk-adjusted capitalization at the strongest level. The assessment also considers the Group’s prudent reserving and good financial flexibility, with access to equity and debt markets. AM Best further notes that Triglav has steadily reduced its exposure to products with guarantees in its life insurance portfolio in recent years and that their impact has also been mitigated by increased investment yield, supported by the increase in interest rates.

In terms of the Group’s operating performance, it has been strong in the last couple of years, driven by excellent non-life technical earnings in the domestic market and by a healthy investment income. With Triglav being the market leader in Slovenia and the wider region, it can effectively leverage the benefits of economies of scale and a well-diversified product portfolio. The Agency expects that Triglav’s full-year results will be impacted by the loss in the health insurance segment driven by a price cap on the supplemental health insurance in Slovenia and natural catastrophe events, particularly the floods in Slovenia. However, these losses are expected to be within the Group’s risk tolerances.

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