S&P Raises If P&C Ratings to ‘A-‘

September 29, 2004

Standard & Poor’s Ratings Services announced that it has raised its long-term counterparty credit and insurer financial strength ratings on Sweden’s If P&C Insurance Ltd. and Finland’s If P&C Insurance Co. Ltd., which are both operating entities of the If P&C Insurance group (If), to ‘A-‘ from ‘BBB+’. The outlook is stable.

In a separate bulletin S&P said it has also revised its outlook on Sampo Bank PLC, If’s parent, “to stable from negative, and affirmed its ‘A-/A-2’ ratings on the bank.”

“The upgrade of If reflects the group’s better-than-expected improvement in earnings, strong competitive position in the Nordic non-life insurance market, and strong capital adequacy, as well as the faster-than-expected debt paydown at If’s parent, Sampo PLC,” indicated S&P credit analyst Paul Bradley. “These positive factors are partially offset by the group’s weak presence in Denmark and Sampo PLC’s still-high dividend requirements for its banking, life, and non-life insurance subsidiaries.”

S&P said, “The ratings are based on If’s stand-alone credit quality and incorporate no explicit support from its parent. Standard & Poor’s continues to view the operating entities of If as strategically important subsidiaries of Sampo PLC (not rated). The stable outlook reflects Standard & Poor’s expectation that If’s strong earnings will be maintained through the cycle, that capital adequacy will remain strong, and that a robust competitive position will be maintained in the Nordic non-life insurance market.

“In addition, the outlook reflects Standard & Poor’s expectation that leverage at Sampo PLC will continue to be managed down. Standard & Poor’s would view positively a further reduction of leverage in the group beyond that already anticipated.”

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