ACRA has assigned a credit rating of AAA to Schweizerische Exportrisikoversicherung (hereinafter, SERV, or the Organization) that is equal to the sovereign rating of Switzerland. The Organization’s rating is based on the high probability of extraordinary support from the Swiss government due to decisive state influence on the Organization, as well as the Organization’s systemic importance to the Swiss economy.
SERV is a Swiss export loan agency that was established according special federal law № 946.10, dated December 16, 2005. The aim of the Organization is to create and maintain jobs in Switzerland and promote Swiss business by creating favorable conditions for participation in international competition. SERV also represents Switzerland in international organizations on export risk insurance.
Key rating assessment factors
Very high systemic importance. SERV is a vehicle for public policy in the field of export support, which is an integral part of the Swiss economy. According to data for 2018, exports accounted for 65% of the country's GDP. SERV is an important quasi-state financial institution; its financial failure would significantly affect Switzerland’s reputation, provoke a crisis of confidence in the financial market, and lead to prolonged financial instability. Given the significant share of exports in the Swiss economy, SERV indirectly contributes to maintaining employment in Switzerland. This also has a positive impact on the final assessment of systemic importance.
Very strong state influence. The Swiss government owns SERV, determines its strategic goals, forms its Board of Directors, and appoints its auditor. The Swiss government determines the maximum limit of insurance liability assumed by SERV, as well as approves tariff and other policies. In order to meet obligations under insurance contracts, the Organization receives loans as necessary from the Swiss government on market terms. In addition, SERV invests its temporarily free funds in the obligations of the Swiss government, also on market terms.
The Organization's creditworthiness does not influence the credit rating, which was assigned based on the Methodology for Analyzing Relationships Between Rated Entities and the State under the International Scale. At the same time, ACRA notes that the Organization’s financial indicators are strong, which will most likely allow SERV to fulfill its financial obligations without government support. According to the Organization's reporting as of December 31, 2018, its internal funds were approximately 2 times higher than possible future losses that may arise with a 99.9% probability. Total liabilities are less than 20% of the liquid assets on SERV's balance sheet.
- Maintained state control over the Organization;
- Sufficient state support to cover losses, should they occur;
- Maintaining key risk metrics at current levels.
Potential outlook or rating change factors
The Stable outlook assumes that the rating will most likely stay unchanged within the 12 to 18-month horizon.
A negative rating action may be prompted by:
- Significant decrease in systemic importance for the Swiss economy;
- Loss of state control over the Organization;
- Downgrade in Switzerland’s credit rating.
Support: On par with Switzerland.
No outstanding issues have been rated.
The credit rating has been assigned under the international scale based on the Methodology for Analyzing Relationships Between Rated Entities and the State under the International Scale and the Key Concepts Used by Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating has been assigned to Schweizerische Exportrisikoversicherung for the first time. The credit rating and its outlook are expected to be revised within one year following the publication date of this press release.
The assigned credit rating is based on the data provided by Schweizerische Exportrisikoversicherung, information from publicly available sources, as well as ACRA’s own databases. The rating analysis was performed using consolidated financial statements of Schweizerische Exportrisikoversicherung according to the principles established by Swiss legislation. The credit rating is unsolicited, and Schweizerische Exportrisikoversicherung participated in its assignment.
No material discrepancies between the provided data and the data officially disclosed by Schweizerische Exportrisikoversicherung in its financial statements have been discovered.
ACRA provided no additional services to Schweizerische Exportrisikoversicherung. No conflicts of interest were discovered in the course of credit rating assignment.