AM Best has moved Allianz’s issuer credit rating outlook to positive from stable and affirmed its financial strength rating at A+ and issuer credit rating at aa-.

A positive outlook indicates the business is experiencing favourable financial and market trends relative to its credit rating, according to AM Best.

“Allianz’s excellent risk-adjusted capitalisation, strong operating performance, diversified business profile and robust risk management framework add positive pressure to its rating.”

AM Best says a ratings upgrade is possible if the German insurer can achieve its stated growth objectives, which include overhauling the mix of live business written and digitalising core underwriting platforms.

“Allianz’s diversified earnings profile has enabled it to generate a long record of strong underwriting and overall results,” the ratings agency says.

“Capitalisation is expected to remain at a similarly robust level over the coming years, with strong earnings retention likely to offset the additional capital requirements of business growth. Although exposure to market risk subjects the group’s solvency to potential volatility, this is mitigated by significant capital buffers that should absorb market movements.”

Allianz’s net profit for the quarter to June 30 fell 46% to €1.1 billion ($1.6 billion).