S&P Global Ratings has affirmed Allianz Australia’s AA- financial strength and issuer credit ratings due to its strategic importance to the German parent.

The insurer’s A- standalone credit profile also remains unchanged.

“We now view the insurer’s risk position as low, with a high-quality and diversified investment portfolio,” the ratings agency says. 

A stable outlook reflects the outlook on parent Allianz.

S&P Credit Analyst Kelvin Bannan says the rating is the result of a strong business risk profile and moderate financial risk profile.

“As Australia’s fourth-largest non-life insurer, Allianz Australia has maintained a solid business profile that it has defended despite soft pricing in some segments,” S&P says.

Growth rates have been driven by expansion of the SA and NT markets and operating performance has remained steady, with “modest improvements” in the loss and combined operating ratios supporting a strong return on equity.

The ratings agency expects Allianz will support its Australian subsidiary “in case of need” or if growth warrants it.