S&P Revises Outlook on France’s MMA to Negative

October 14, 2002

Standard & Poor’s announced that it has revised its outlook on the single-‘A’-minus financial strength and counterparty credit ratings on the French p/c insurer Les Mutuelles du Mans Assurances IARD, the parent and largest operating entity of the MMA group, to negative from stable.

S&P’s Paris-based credit analyst and director Yann Le Pallec explained that the “outlook revision reflects the challenges that the MMA group faces in rebuilding its consolidated risk-adjusted capitalization to its historically strong level and in maintaining the expected gradual improvement in its operating performance following the recent fall in equity markets and MMA’s acquisition of Winterthur France’s life and non-life books at the beginning of 2002.”

He indicated, however, that S&P believed MMA could successfully integrate the Winterthur operations, “while managing its balance sheet in line with its historically conservative management policy.”

S&P noted that “with total gross premium income of EUR3.5 billion [$3.46 billion] in 2001, MMA has a strong business position in property-casualty personal lines in France. Life operation MMA Vie is, in comparison, more modest.”

“Management at MMA has a unique track record in the French insurance industry for building a competitive and innovative personal lines insurance group selling through the traditional channel of tied agents,” the bulletin concluded.

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