Bologna, 27 Novembre 2015 RATING DAGONG EUROPE CREDIT RATING
Si comunica che, in data odierna, l'agenzia di rating Dagong Europe
Credit Rating (Dagong Europe) ha assegnato per la prima volta i
rating a UnipolSai Assicurazioni S.p.A. e a Unipol Gruppo
Finanziario S.p.A.. Per quanto riguarda UnipolSai Assicurazioni
S.p.A., Dagong Europe ha assegnato un long-term credit rating pari
a "BBB+" e uno short term credit rating pari a "A-2". Per quanto
concerne Unipol Gruppo Finanziario S.p.A., Dagong Europe ha
assegnato un long-term credit rating pari a "BBB-" e uno short term
credit rating pari a "A-3". L'outlook sul long-term credit rating
assegnato ad entrambe le richiamate società è "stable". Si allega
il testo integrale del report emesso dall'agenzia.
Contatti Ufficio Stampa Gruppo Unipol Fernando Vacarini Tel.
+39/051/5077705 pressoffice@unipol.it Barabino & Partners
Massimiliano Parboni m.parboni@barabino.it Tel. +39/335/8304078
Giovanni Vantaggi g.vantaggi@barabino.it Tel. +39/328/8317379
Investor Relations Gruppo Unipol Adriano Donati Tel.
+39/051/5077933 investor.relations@unipol.it
Unipol Gruppo Finanziario S.p.A. Unipol è uno dei principali gruppi
assicurativi in Europa con una raccolta complessiva pari a circa
17,8 miliardi di euro, di cui 8,9 miliardi nei Rami Danni e 8,9
miliardi nei Rami Vita (dati 2014). Unipol adotta una strategia di
offerta integrata e copre l'intera gamma dei prodotti assicurativi
e finanziari, operando principalmente attraverso la controllata
UnipolSai Assicurazioni S.p.A., nata all'inizio del 2014, leader in
Italia nei rami Danni, in particolare nell'R.C. Auto. Il Gruppo è
attivo inoltre nell'assicurazione auto diretta (Linear
Assicurazioni), nella tutela della salute (UniSalute), nella
previdenza integrativa e presidia il canale della bancassicurazione
(Gruppo Arca Vita e Gruppo Popolare Vita). Opera infine in ambito
bancario attraverso la rete di sportelli di Unipol Banca e gestisce
significative attività diversificate nei settori immobiliare,
alberghiero (Atahotels) e agricolo (Tenute del Cerro). Unipol
Gruppo Finanziario S.p.A. è quotata alla Borsa Italiana.
Press Release Solicited Rating
Dagong Europe Assigns Long-Term Credit Rating of `BBB+' to
UnipolSai Assicurazioni S.p.A. and `BBB-' to Unipol Gruppo
Finanziario S.p.A., Outlook Stable
Rating Action Report Milan, 27 November 2015
Dagong Europe has assigned a Long-Term Credit Rating of `BBB+' to
Italy-based insurer UnipolSai Assicurazioni S.p.A. (UnipolSai), and
Long-Term Credit Rating of `BBB-' to Unipol Gruppo Finanziario
S.p.A. (UGF), a non-operating holding company of the Unipol Group
(group of entities consolidated under UGF, hereafter called Unipol
Group or UG). The Outlook on both entities is `Stable'.
RATING RATIONALE
The Long-Term Credit Rating of `BBB+' for UnipolSai combines an
Individual Financial Strength Assessment (IFSA) of `bbb+', and a
`Very High' External Support coming from the Unipol Group. The IFSA
of UnipolSai is based on UGF's consolidated accounts that for
analytical purposes we name Unipol Group. UnipolSai represents
above 90% of gross premiums written and approx. 78% of total assets
of Unipol Group, and in our view reflects the main credit
characteristics. UnipolSai's IFSA of `bbb+' reflects its strong and
resilient competitive position in Italy, good risk management
practices, solid profitability of the insurance activities that
constitute the majority of their business, and the strong
development strategy. These strengths are partially offset by a
challenging economic and industry environment, weak performance of
non-insurance operations, only satisfactory capital, a high
investment concentration in Italian government bonds, and a
significant investment exposure to the real estate sector in Italy.
The `BBB-' rating assigned to UGF, the ultimate non-operating
holding entity of the group, reflects its IFSA of `bbb-', derived
by notching down from the Unipol Group due to its non-operating
holding status and creditors' subordination. The main
considerations for the IFSA for UnipolSai are based on our analysis
of the Unipol Group: Strong competitive position: In our view,
Unipol Group has a strong and defendable competitive position as
the largest non-life insurer and second largest composite insurance
group in Italy. It has a very strong distribution network with a
high level of controlled channels, and offers a wide range of
innovative and quality-oriented products. Good and improving risk
management: The Unipol Group has a centralised risk management
function based in UnipolSai, a large and experienced team, a
well-defined risk management framework, and comprehensive processes
in place. The risk management culture is embedded in the
organisation and drives the decision-making. Satisfactory capital:
UG has a large capital base in absolute terms, of just above EUR
8Bn at 1H15, which is sufficient to finance its insurance
operations growth and protect from
Primary Analyst Linas Grigaliunas Director Financial Institutions
linas.grigaliunas@dagongeurope.com Back-up Analyst Carola Saldias
Sector Head Senior Director Financial Institutions
carola.saldias@dagongeurope.com Committee Chairperson Richard
Miratsky Sector Head Senior Director Corporates
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Press Release Solicited Rating
unexpected losses. Its regulatory solvency I ratio is good, and
stood at 169% in 1H15. However, the capital is exposed to
volatility and a possible material weakening in economic downturn
or financial market turbulence scenarios, due to the group's
investment profile. UG has a high concentration of Italian
government bonds (EUR 36.9Bn in 1H15), which amounts to 67% of
invested assets excluding real estate. In addition, it has high
exposure to the currently weak Italian real-estate sector via its
investments, and to a lesser extent mortgages issued through its
banking operations (EUR 4.4Bn in 1H15, excluding Unipol Banca
mortgage exposure). Strong development strategy: We regard UG's
Development Strategy as Strong. It is based on an experienced and
highly regarded management team, with a successful track record of
M&A and strategy execution. It has in our view successfully
executed most of the three-year industrial plan goals including
streamlining processes, simplifying organisational structures and
improving efficiency. Satisfactory operational environment: This
represents the major rating constraint for the group in our view.
The weak Italian economy with its shrinking GDP over the last few
years, high unemployment rate at above 12%, and bleak future
prospects weigh heavily on Unipol Group and the whole insurance
industry in Italy. These economic weaknesses are further
exacerbated by the stagnating European economy and low global
demand. We consider the likely level of External Support for
UnipolSai from UG to be `Very High'. UnipolSai is the group's main
operating entity, accounting for above 90% of its premiums and 78%
of total assets. In our view, UG's financial and business strength
is largely defined by UnipolSai's characteristics. We expect UG to
support UnipolSai in any circumstances. The `BBB-' rating on UGF is
positioned two notches below UnipolSai's IFSA of `bbb+'. The
twonotch deduction reflects: 1) its non-operating holding entity
status and high dependence on mainly one source of income from
UnipolSai; 2) Its creditors' subordination due to a material amount
of debt issued by operating entities within the group; and 3) the
high level of liquidity of UGF's standalone financial profile.
RATING OUTLOOK AND POSSIBLE EVOLUTION UnipolSai: Outlook - Stable
Unipol Group is in the final stage of a significant transformation
process. We believe the restructuring could significantly
strengthen its competitiveness and financial position. However, we
believe its exposure to industry-wide issues such as the weak and
unstable economic environment, changing industry dynamics and
regulatory and solvency requirements add a degree of uncertainty
regarding the speed and scale of improvements in business growth
and profitability. The `Stable' Outlook for UnipolSai reflects our
expectations that Unipol Group improvements in profitability,
reduction in investment risk profile and strengthening of capital
will be gradual. We expect the net combined ratio over the next 3
years to be on average about 95%, return on equity above 5%,
non-life premiums to shrink at about 7%, and life premiums to grow
above 10%. UPSIDE - DOWNSIDE POTENTIAL FOR THE RATING We could
consider a positive rating action if we see significant de-risking
of the investment portfolio, increased capitalisation and sustained
improvement in the group's bottom line results.
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We would consider a negative rating action if we see weakening
profitability of the main insurance business, or growing losses
deriving from non-core banking or real estate activities, resulting
in weakening capitalisation. UGF: Outlook - Stable The stable
outlook also applies to UGF. UPSIDE - DOWNSIDE POTENTIAL FOR THE
RATING Any changes to the ratings of UGF could come in parallel
with changes in credit characteristics at Unipol Group and rating
changes at UnipolSai. We would also consider a positive rating
action if we see a sustainable strengthening in the individual
financial profile though improved and sustained earnings from
non-insurance business, coverage ratios, or a material reduction of
debt at operatingentities level (UnipolSai). However, we see this
as unlikely in the next 18 to 24 months. We would consider a
negative rating action if we see deterioration of liquidity or
coverage ratios. BUSINESS PROFILE Unipol Group is the second
largest multiline insurance group in Italy, and one of the largest
in Europe with EUR 17.8Bn in gross premiums written and EUR 88.6Bn
in assets at YE14. Its nonlife operations are the largest in the
country, with an over 24% market share and EUR 9Bn in gross
premiums written at YE14. Life operations are the fifth largest in
Italy with an approx. 7% market share, and account for EUR 8.8Bn1
in gross premiums written. Unipol Group is also a leading Italian
occupational pension insurance player, with assets under management
of EUR 3.7Bn. The group's non-life portfolio is dominated by motor
insurance at 58%. The rest is split between property 13.2%,
accident and health 14.2%, general third-party liability 8.5%, and
other 6%. The group has rapidly gained in size and market share
through a series of successful M&A's over the past decade. It
started its M&A-driven growth in 2000 by acquiring Aurora
Assicurazioni, Navale Assicurazioni, Meie Assicurazioni and
Winterthur Italia Group. Other acquisitions followed, with the last
acquisition in 2012 of Premafin (including FondariaSai and Milano
Assicurazioni). In January 2014, UnipolSai was established as a
result of the merger by incorporation of Unipol Assicurazioni,
Milano Assicurazioni, and Premafin HP into FondariaSai. UnipolSai
is the main operating company of the Unipol Group, with about 90%
of its consolidated premiums written. The specialty insurance lines
or specific distribution approaches were placed under separate
legal entities, such as SIAT (marine and transportation insurance),
Linear (online non-life insurance), Unisalute (health), Arca Vita
(life) and Popolare Vita (life). The group also includes a bank -
Unipol Banca, real estate companies, and other minor entities. The
group has two listed entities: UnipolSai Assicurazioni S.p.A. and
Unipol Gruppo Finanziario S.p.A. UnipolSai is majority-owned and
controlled by UGF (61.1%). UGF shares, in turn, are largely
free-floating (68.6%) after majority owner Finsoe (Italian
cooperative companies group) reduced its holding to 31.4% from
50.8%, following the conversion of preference shares into ordinary
shares on 30 June 2015.
1
Excluding investment products
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Press Release Solicited Rating
FULL LIST OF SOLICITED RATINGS ASSIGNED
UnipolSai Assicurazioni S.p.A. Long-Term Credit Rating (FC&LC)
Outlook Short-Term Credit Rating (FC&LC) IFSA ESA Unipol Gruppo
Finanziario S.p.A. Long Term Credit Rating (FC&LC) Outlook
Short-Term Credit Rating (FC&LC) IFSA ESA
FC&LC: Foreign Currency and Local Currency
BBB+ Stable A-2 bbb+ Very High, Group Support
BBBStable A-3 bbbModerate, Parent Support
CRITERIA APPLIED
Dagong Europe Criteria for Rating Insurance Companies, updated on
18 November 2015 Dagong Europe Ratings Definitions, published on 13
May 2014
CONTACTS
Primary Analyst Linas Grigaliunas Director Financial Institutions
Tel. +39 02 72746029 linas.grigaliunas@dagongeurope.com Back-up
Analyst Carola Saldias Sector Head Senior Director Financial
Institutions Tel. +39 02 72746022 carola.saldias@dagongeurope.com
Committee Chairperson Richard Miratsky Sector Head Senior Director
Corporates OTHER REGULATORY DISCLOSURES The List of Ratings
included in this Rating Action Report were solicited and disclosed
to the issuer(s). Dagong Europe uses public and non-public
information provided by the issuer, public information from
reliable third-party sources and internally developed models and
analytical tools. Dagong Europe analytical team does not take into
consideration sources of information deemed not reliable. This
Rating Action Report was disclosed to the rated entity before being
issued. Dagong Europe had provided a one advance copy to the issuer
to review factual errors and unintentional release of confidential
information. Dagong Europe maintains editorial control over the
Rating Action Report, representing its independent opinion.
For any further information on criteria and procedures, please
refer to the following links:
http://www.dagongeurope.com/ratingcriteria
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Sidney Shin-Yi Dung Chief Communications Officer Tel +39 02 727460
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