S&P Bulletin Recognizes AXA’s Auto Policy Securitization

March 10, 2006

The London office of Standard & Poor’s Ratings Services has issued a statement indicating that it will “recognize a capital relief in its capital adequacy model for AXA Group (core insurance operating companies are rated AA-/Positive) related to the insurer’s innovative securitization of its French motor [automobile] insurance business (FCC SPARC; tranches are rated ‘AAA’, ‘A’, and ‘BBB’).”

S&P said it would “determine the amount of the capital relief based on its understanding of the economic benefits of this transaction. In addition to this quantitative benefit, we continue to give insurers qualitative credit for such transactions, as they represent an additional funding source that enhances financial flexibility.

“Furthermore, extensive analysis performed by AXA Group has demonstrated that the capital requirements of Standard & Poor’s capital model for motor insurance business are likely overstated for the French market. Consequently, in the upcoming review of our capital model, we will likely reduce the charges for motor insurance business in France.”

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