Gothaer Group

The positive outlook indicates that we could upgrade Gothaer in the next 12-18 months if the group establishes a track record of firmly consolidating capital at very strong levels, while stabilizing investment risks at current levels. We could revise the outlook to stable if Gothaer's capital adequacy weakens below the 'AA' level for a prolonged period over the next 12-18 months because of rising capital requirements, significantly lower retained earnings, or a return to a more aggressive risk appetite. The same could apply the impact of COVID-19 results in significant underperformance compared with our base-case capital and earnings forecasts. We expect Germany's real GDP will decrease by about 5.0% this year, and rebound by 4.7% in 2021. Low inflation coupled

...S&P Global Ratings believes Gothaer will maintain its established market position in Germany, backed by the group's broad product portfolio. Gothaer writes all three lines of business, namely property and casualty (P/C), life, and health. In our opinion, this makes Gothaer less susceptible to any adverse developments in a single business line. In addition, we believe the group will leverage its established distribution network to promote cross-selling opportunities, therefore enabling it to maintain its market standing in the mature German insurance market. We expect Gothaer's profitability will remain resilient amid the turbulent market conditions, supported by the group's stable underwriting discipline. Gothaer has historically demonstrated underwriting discipline and we do not anticipate any major deviations going forward. Hence, we believe that the group's profitability will remain resilient to COVID-19-related pressure. Overall we assume Gothaer will post net income of 70 million-90...

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