Allianz Risk Transfer AG - Allianz Global Corporate & Specialty

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Table Of Contents (cont.) Capitalization: Strong, With A Strong Quality Of Capital Financial Flexibility: Very Strong, With AZSE's Support Related Criteria And Research WWW.STANDARDANDPOORS.COM/RATINGSDIRECT SEPTEMBER 3, 2012 2 1006376 | 301069137
Allianz Risk Transfer AG Please note that the ratings covered by this full analysis apply only to entities of the group, which are listed below in the Ratings Detail section. These ratings do not apply to any noncore or nonrated entities of the group. Ratings assigned to noncore entities of the group are published individually. Major Rating Factors Strengths: • Strategically important to ultimate parent, Allianz SE. • Strong competitive position and effective management. • Strong operating performance. • Strong capitalization. Weaknesses: Operating Companies Covered By This Report Financial Strength Rating Local Currency AA-/Negative/-- • Potential for volatility in new business volumes, arising from an innovative approach to risk transfer and competitive pressure. • Potential for earnings fluctuations as a result of volatility in traditional portfolios, foreign exchange effects, or challenging capital markets. Rationale The ratings on Switzerland-based Allianz Risk Transfer AG (ART AG) and its guaranteed subsidiaries, Bermuda-based Allianz Risk Transfer (Bermuda) Ltd. and Dutch entity Allianz Risk Transfer N.V. (collectively ART), reflect the companies' strategic importance to their ultimate parent Allianz SE (AZSE; AA/Negative/A-1+). As a result of this "strategically important" status, the ratings on ART currently benefit from two notches of implicit group support. Under Standard & Poor's Ratings Services' criteria, the ratings could benefit from up to three notches of support, but are capped at one notch below the ratings on AZSE's core operating subsidiaries. In our view, ART's stand-alone creditworthiness is underpinned by its strong competitive position, effective management, strong operating performance, and strong capitalization. These factors are partly offset by the potential for volatility in new business volumes, which may arise as a result of ART's innovative approach to risk transfer and its opportunistic strategy in terms of business development. We believe earnings could continue to fluctuate because of the still challenging conditions in the global economy and financial markets, foreign exchange effects, or volatility in traditional portfolios. We consider ART strategically important to AZSE, due to its strong operational integration and business relationships with other Allianz operations, especially with its intermediate parent Allianz Global Corporate & Specialty AG (AGCS; AA/Negative/--). In addition, the company plays an increasingly important role in AGCS' expansion plans and is the competence center for alternative insurance risk transfer solutions, which, we believe, provides the wider group with the means to maintain a competitive edge with corporate clients. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT SEPTEMBER 3, 2012 3 1006376 | 301069137
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Allianz Risk Transfer AG - Allianz Global Corporate & Specialty

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