S&P Assigns ‘A-‘ Rating to Italy’s Toro, Nuova Tirrena

Standard & Poor’s Ratings Services announced that it has assigned its ‘A-‘ long-term counterparty credit and insurer financial strength ratings to Italy-based composite insurers Toro Assicurazioni SpA and Nuova Tirrena SpA, with a stable outlook.

“The ratings on Toro Assicurazioni reflect the Toro group’s low risk profile, improved strategy, and strong property/casualty operating performance and capitalization,” stated S&P credit analyst Antonello Aquino. “Offsetting factors are the group’s concentration in motor business and the weak profitability of the life portfolio.”

S&P notes: “The ratings on Nuova Tirrena, a 92 percent-owned subsidiary of Toro Assicurazioni, reflect its core status to the Toro group. The stable outlook reflects Standard & Poor’s expectation that the Toro group will maintain its good competitive position in the Italian market and its low risk profile. In property/casualty, growth is expected to stem principally from nonmotor lines of business.

“We expect management to deliver on its new strategy. The introduction of a sales force in the agencies and the change of the agents’ commission structure to push life products may have some positive effects on the growth of life premiums and profitability. We believe that motor profitability reached its peak in 2004 in terms of the loss ratio, and that further improvement will be limited.”

S&P also said it expects the Toro Group’s capitalization “to remain at a strong level. The stable outlook also assumes that DeAgostini SpA, the Toro group’s controlling shareholder, will establish a balanced financial policy enabling comfortable debt servicing at the holding level through ordinary dividends from its investments. Any significant deterioration in DeAgostini’s financial strength may have a negative effect on the ratings on Toro.”