S&P Affirms Groupama Ratings

Standard & Poor’s announced that it has affirmed all of its ratings on French composite insurer Groupama, except for two units which remain on CreditWatch with developing implications.

S&P affirmed the single-‘A’ counterparty credit and insurer financial strength on the parent company Caisse Centrale des Assurances Mutuelles Agricoles (CCAMA) and other group units, but said it was keeping Groupama General Insurance Co. Ltd. and Groupama Insurance Co. Ltd. on CreditWatch with developing implications. It also gave a single-‘A’- minus rating to the Group’s banking arm Banque Finama.

It gave first time single-‘A’ long term insurer financial strength ratings to the Group’s property/casualty subsidiaries GAN Assurances IARD and GAN Eurocourtage IARD, “based on a formal guarantee provided by CCAMA.”

S&P commented on recent Groupama restructuring, and its decision to concentrate on its core market in France, noting that it’s “already the second- largest domestic property-casualty insurer.” Groupama has sold off some unprofitable and non-strategic units, notably its Sorema reinsurance interests to SCOR Re, and two joint banking ventures; it’s currently seeking to exit the U.K. market as well.

“Groupama is now determined to extract value from its proprietary distribution channels — Groupama branches and GAN tied agents — as evidenced by the recent conclusion of a long-term partnership agreement with Société Génerale [France’s third largest bank], whereby the two groups will set up a retail banking joint venture dedicated to Groupama’s policyholders and targeting 500,000 clients by 2006,” said the S&P announcement.

Despite some weakness, and the necessity to achieve further cost cutting and to improve the combined ratio of GAN Assurances IARD, which is currently at 118.7 percent, S&P expects the Group’s operating performance to improve, and its expected to retain its strong capital adequacy ratio “in excess of 160%.”|”snp, affirms, groupama, ratings