AMSTERDAM–(BUSINESS WIRE)–#insurance–AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” (Fair) of ONIX Asigurari S.A. (ONIX) (Romania). The outlook of these Credit Ratings (ratings) is stable.
These ratings reflect ONIX’s balance sheet strength, which AM Best assesses as adequate, as well as its strong operating performance, limited business profile and marginal enterprise risk management.
ONIX’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level as at year-end 2022, underpinned by good internal capital generation. However, ONIX’s small capital base and its lack of reinsurance protection increase the potential for volatility in risk-adjusted capitalisation, particularly considering the company’s exposure to large surety risks. The company’s limited financial flexibility is also considered an offsetting factor in its balance sheet strength assessment. Conversely, AM Best views the reduction in Onix’s exposure to Romania’s sovereign bonds (5% of the investment portfolio at year-end 2022 vs. 38% at year-end 2021) as a positive factor in this area.
ONIX’s operating performance is assessed at the strong level, reflecting its track record of good technical results since inception. For the five-year period ending in 2022, the company reported a weighted average combined ratio of 58.6%, as calculated by AM Best. Non-technical profits have been modest, reflecting the company’s liquid investment portfolio.
ONIX is a niche mono-line insurer that focuses on surety business in Italy and Spain. The company leverages its specialist expertise to compete against larger players.
Solvency II is part of ONIX’s corporate culture, and its Solvency II regulatory capital adequacy ratio is monitored against risk appetite levels approved by its board. The company’s risk management framework is evolving and its risk management capabilities are considered by AM Best to be below the company’s risk profile in some areas.
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Jose Berenguer, CFA
Senior Financial Analyst
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Associate Director, Public Relations
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Dr. Mathilde Jakobsen
Senior Director, Analytics
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Senior Public Relations Specialist
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