S&P: Resilience of French Insurance Industry Will Be Tested Further

June 29, 2011

Standard & Poor’s Ratings Services has published a report – “French Insurance Industry Holds Up Under Pressure, But Challenges Still Lie Ahead” – on the challenges the French insurance industry is likely to face over the next two years.

S&P said the “industry has displayed its resilience in the face of adverse operating and financial market. However, we believe that in the next two years, it will have to cope with challenges on a variety of fronts.

“It will face potential uncertainties regarding the tax advantages of life policies and the future application of the EU’s Solvency II regulatory framework, which is due to come into force in 2013; as well as low interest rates and dampened equity markets. Lower technical earnings in life and property/casualty are further weakening insurers’ capital adequacy, which is likely to put further pressure on ratings.”

In addition S&P said it is monitoring the “exposure of French players to some south European sovereign issuers, particularly Greece. French players are more exposed than their European counterparts and this weighs on the financial strength of some insurers in our rated universe.”

The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor’s public Web site by using the Ratings search box located in the left column at www.standardandpoors.com.

Source: Standard & Poor’s

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