MELBOURNE, Australia, Feb. 12 /PRNewswire/ -- Standard & Poor's today
affirmed its single-'A'-plus insurer financial strength and counterparty
credit ratings assigned to Zurich Australian Insurance Ltd. (Zurich General)
and Zurich Australia Ltd. (Zurich Life) - the Zurich Australia Group. The
outlook has been revised to stable from negative, reflecting the explicit
support from the group's ultimate parent, Zurich Insurance Co.
(ZIC; double-'A'/Watch Neg/'A-1'-plus).
Zurich Australia Group's ratings are supported by its strong
capitalization derived from a solid level of surplus capital held in Zurich
Life and its improved earnings momentum, although from a lackluster base.
"While the group demonstrates good investment performance and a strong global
brand, this has yet to translate into an improved market position, which is
now more important where benefits of scale are needed in a competitive
industry," said Michael Vine, director, Financial Services Ratings.
The Australian operations also have realigned their business strategy
toward lower risk business lines, reducing corporate insurance exposures.
"Although the Australian operation has experienced difficulty in achieving
scale in its life business, lower earnings volatility and improved operating
performance are expected following the reassessment and realignment of its
business strategy," added Mr. Vine.
The improved outlook reflects the migration toward lower risk lines of
business and better operational management within the Australian operations.
Additionally, the Australian operations are considered a strategically
important component of the Swiss-based insurer's global network of operations
and, in particular, its activities in Asia. Management has made good progress
toward implementing the main elements of ZIC's funds management initiatives
and refined global financial services strategy. The Australian operations also
have refocused attention on key business areas where weaknesses had been
identified. Though much of the structure required to reinvigorate Zurich's
Australian profile has been put in place, the expected benefits of this have
yet to be realized and uncertainty remains.
SOURCE Standard & Poor's
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Related links:
http://www.standardandpoors.com/ratings
CONTACT:
Michael Vine, +61-3-9631-2102, Craig Bennett,
+61-3-9631-2098, both of Standard & Poor's
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