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June 23 (The following statement was released by the rating agency)
Fitch Ratings has affirmed Germany-based ERGO Versicherungsgruppe AG's (ERGO) operating insurance companies at Insurer Financial Strength (IFS) ratings 'AA-' with Stable Outlook. The affected entities are ERGO Lebensversicherung AG (ERGO Life), DKV Deutsche Krankenversicherung AG (DKV), VORSORGE Lebensversicherung AG (Vorsorge) and Europaeische Reiseversicherung AG (ERV).
ERGO Life, DKV, Vorsorge and ERV are 100% subsidiaries of the holding company, ERGO. Fitch has also affirmed ERGO's Long-term Issuer Default Rating (IDR) at 'A+' with a Stable Outlook.
KEY RATING DRIVERS
The rating actions follow the affirmation of Munich Re's IFS rating at 'AA-' (see "Fitch Affirms Munich Re's IFS Rating at 'AA-'; Outlook Stable", dated 23 June 2014 on www.fitchratings.com). Munich Re is ERGO's 100% shareholder. ERGO's ratings reflect its core status within Munich Re's operations. ERGO Life, DKV, Vorsorge, and ERV are viewed by Fitch as core to ERGO in terms of their size and strategic importance.
ERGO is Munich Re's primary insurance group. At end-2013, ERGO had total assets of EUR147.5bn (2012: EUR147.2bn) and reported net income of EUR435.9m (2012: EUR290.3m). Fitch expects that ERGO's reported net income will be stable in 2014. It also expects that ERGO will maintain its strong underwriting profitability in its German non-life business and further improve its international underwriting profitability in 2014.
The key triggers for a rating change are any change in Fitch's view of the strategic importance of the companies within the Munich Re group and any change in Munich Re's ratings.