Morningstar DBRS Confirms the Financial Strength Rating of Siat Societa Italiana di Assicurazioni e Riassicurazioni p.A. at A (high) With a Stable Trend

DBRS Ratings GmbH (Morningstar DBRS) confirmed the Financial Strength Rating (FSR) of Siat Societa Italiana di Assicurazioni e Riassicurazioni p.A. (Siat or the Company) at A (high) with a Stable trend.

KEY CREDIT RATING CONSIDERATIONS
As a wholly owned and strategically important subsidiary of Unipol Assicurazioni S.p.A. (Unipol), Siat's credit ratings are primarily driven by its parent's credit rating. As per Morningstar DBRS' "Global Methodology for Rating Insurance Companies and Insurance Organizations", the equalization of Siat's FSR with that of Unipol reflects the expectation of support from the parent for this subsidiary, given the Company's strategic and financial importance to the parent.

As a strategically important subsidiary of Unipol's group, Siat maintained its strong presence and expertise in the marine insurance business in Italy. The Company is well integrated with its parent, which provides many operational functions, including asset portfolio management, risk management, audit, information technology, and actuarial services. Morningstar DBRS also takes into consideration Siat's meaningful market position in the hull and cargo business, supported by a well-entrenched distribution network of brokers. Siat maintained solid profitability metrics in 2024 and strong capitalisation, thanks to a solvency II ratio well above minimum regulatory requirements.

CREDIT RATING DRIVERS
As Siat's credit rating primarily reflects the credit rating of Unipol, an upgrade of Unipol's FSR would result in an upgrade of Siat's credit rating.

Conversely, a downgrade of Unipol's credit rating would result in Siat's credit rating downgrade. In addition, any indication of Unipol's reduced ability or willingness to support Siat would result in a downgrade.

CREDIT RATING RATIONALE
Franchise Strength Building Block Assessment: Strong
Siat is Unipol's subsidiary that specialises in the marine insurance business. The Company maintained strong market shares in both the hull and cargo segments (26.5% and 15.3% respectively in 2024). In 2024, around 60% of total premiums were related to the hull segment and around 40% to cargo. Siat's distribution network is mostly related to brokers (around 90% of premiums in 2024) and Unipol's agency network (10%).

Earnings Ability Building Block Assessment: Strong/Good
In 2024, Siat's gross written premiums decreased to EUR 178 million from EUR 192 million in 2023. The reduction was mostly attributable to the hull business whose premiums decreased by around 10% year over year (YoY). Nevertheless, the Company's underwriting profitability remained strong, as the combined ratio decreased to 84.4% in 2024, compared to 86.8% in 2023. The result was mostly driven by a negative expense ratio which benefited from higher commissions paid for reinsurance premiums ceded.

Risk Profile Building Block Assessment: Good
Siat has well-developed and efficient internal controls and risk management systems, which are integrated into those of its parent. Morningstar DBRS notes that a substantial part of the underwriting risk in Siat's portfolio is ceded through outward reinsurance. Siat's investment management strategy is considered conservative with 85% of investments allocated to the investment grade bonds. However, credit risk in Siat's investment portfolio is constrained by a still significant exposure towards BBB-rated bonds, of which the majority Italian government bonds.

Liquidity Building Block Assessment: Strong/Good
The nature of Siat's business exposes it to some claims volatility. However, claims volatility is materially mitigated by Siat's comprehensive reinsurance programme. Moreover, substantial holdings of liquid fixed income securities enhance the Company's liquidity profile.

Capitalisation Building Block Assessment: Good
Siat's capitalisation is sound, supported by a solid capital buffer against the minimum capital requirement and internal risk appetite levels. The Company's Solvency II ratio was 162% at YE24, slightly lower than 168% at YE23. The use of reinsurance helps reducing required regulatory capital for insurance risk and the ownership by Unipol provides some flexibility in the timing and frequency of dividend payments.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS

Credit rating actions on Unipol Assicurazioni S.p.A. are likely to have an impact on this credit rating. ESG factors that have a significant or relevant effect on the credit analysis of Unipol Assicurazioni S.p.A. are discussed separately at https://dbrs.morningstar.com/issuers/25915.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (16 May 2025) https://dbrs.morningstar.com/research/454196

Morningstar DBRS notes that this Press Release was amended on 25 July 2025 to exclude the Issuer Rating from the title and the opening paragraph of the Press Release.

Notes:
All figures are in Euros unless otherwise noted.

The principal methodology is the Global Methodology for Rating Insurance Companies and Insurance Organizations (10 September 2024) https://dbrs.morningstar.com/research/439195. In addition Morningstar DBRS uses the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (16 May 2025) https://dbrs.morningstar.com/research/454196 in its consideration of ESG factors.

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

The sources of information used for this credit rating include Morningstar, Inc. and company documents, Unipol's consolidated annual reports 2018-24, Unipol's Solvency and Financial Condition Report 2018-24, Unipol's Q1 2025 consolidated results, Unipol's H1 2024 consolidated interim financial report, Unipol's 2024 Solvency and Financial Condition Report, and Unipol's investor presentations. Morningstar DBRS considers the information available to it for the purposes of providing this credit rating to be of satisfactory quality.

Morningstar DBRS does not audit the information it receives in connection with the credit rating process, and it does not and cannot independently verify that information in every instance.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS's trends and credit ratings are under regular surveillance.

For further information on Morningstar DBRS historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: https://registers.esma.europa.eu/cerep-publication. For further information on Morningstar DBRS historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see https://data.fca.org.uk/#/ceres/craStats.

The sensitivity analysis of the relevant key credit rating assumptions can be found at: https://dbrs.morningstar.com/research/458576.

This credit rating is endorsed by DBRS Ratings Limited for use in the United Kingdom.

Lead Analyst: Mario De Cicco, Vice President, Global Insurance & Pension Ratings
Rating Committee Chair: Michael Driscoll, Credit Rating Officer, Global Financial Institution Ratings
Initial Rating Date: 8 October 2020
Last Rating Date: 17 July 2024

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