AM Best


A.M. Best Affirms Ratings of Delvag Luftfahrtversicherungs-AG and Its Subsidiary


CONTACTS:

Konstantin Langowski
Financial Analyst
+44 20 7397 0327
kony.langowski@ambest.com

Mathilde Jakobsen
Associate Director, Analytics
+44 20 7397 0266
mathilde.jakobsen@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

LONDON - AUGUST 24, 2016 11:38 AM (EDT)
A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit ratings of “a” of Delvag Luftfahrtversicherungs-AG (Delvag) and its subsidiary, Delvag Rueckversicherungs-AG (Delvag Rueck) (both domiciled in Germany). The outlook for each of the ratings remains stable.

The rating affirmations reflect Delvag’s strong risk-adjusted capitalisation and its track record of solid operating performance. The ratings also consider Delvag’s role as the insurance captive of Deutsche Lufthansa Aktiengesellschaft (Lufthansa), its ultimate parent. A partly offsetting rating factor is Delvag’s dependence on reinsurance to protect the Lufthansa fleet business; however, the associated credit risk is mitigated through the use of a financially strong and diverse reinsurance panel.

A.M. Best expects Delvag’s risk-adjusted capitalisation to remain strong, reflecting the captive’s moderate risk profile. A profit and loss absorption agreement with Lufthansa provides balance sheet protection but limits the captive’s accumulation of earnings.

The ratings also consider the captive’s track record of robust earnings, which is underpinned by strong technical performance. Prospective combined ratios are expected to be in line with the five-year average of 65% (2011-2015), supported by disciplined underwriting and a comprehensive reinsurance programme.

Delvag’s profile is enhanced by its strategic importance to and integration within the Lufthansa group. It continues to leverage its expertise in the aviation and transport sectors to write a book of third-party business alongside its core Lufthansa fleet portfolio.

The ratings of Delvag Rueck reflect its role within the Delvag group, as well as explicit support in the form of a profit and loss absorption agreement between the two companies. Delvag Rueck’s risk-adjusted capitalisation remains good.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to rating(s) 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.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.


Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.