S&P Follows up on Euro Zone Rating Actions

By | January 18, 2012

Standard & Poor’s Ratings Services has followed up on the rating actions it announced in December concerning a number of Europe’s largest insurers.

S&P has lowered its ratings on the following insurers (and certain related operating subsidiaries and certain holding companies) and removed them from CreditWatch with negative implications:
• Allianz SpA,
• Caisse Centrale de Reassurance (CCR),
• Mapfre Group,
• Millenniumbcp-Ageas Group, and
• Nacional de Reaseguros S.A. (Nacional).

The bulletin explained that the lower ratings on Allianz SpA, Mapfre Group, and Millenniumbcp-Ageas Group were by “two notches and CCR and Nacional by one notch.” The outlooks for the ratings on these companies, however, remain negative, which means that they could be lowered further.

S&P lowered its ratings on the following insurers (and certain related operating subsidiaries and certain holding companies) by one notch, but also kept them on its CreditWatch negative:
• Societa Cattolica di Assicurazione (Cattolica),
• Generali Group, and
• Unipol Group.

However, S&P said it has affirmed the current ratings for the following insurers and has removed them from CreditWatch, but the outlooks for the ratings remain negative:
• Allianz PLC,
• Aviva Insurance (Europe) SE,
• AXA Insurance Ltd.,
• Irish Public Bodies Mutual Insurances Ltd. (IPB),
• RSA Insurance Ireland Ltd. (RSA Ireland),
• Pozavarovalnica Sava d.d., and
• Triglav Group.

S&P also said that it has not yet completed its review “of the effect of the sovereign actions on Allianz Group, Aviva Group, AXA Group, and CNP Group and have therefore not taken any rating action on these groups today.”

The rating actions are linked to the ratings of the various European countries sovereign debts ratings, which S&P either lowered or put on CreditWatch in December. Nine of the ratings out of the 17 euro zone member countries were lowered, while S&P affirmed the ratings on the other seven euro zone countries. All of the countries were then removed from S&P’s CreditWatch.

However, S&P’s bulletin stated: “The bias of our insurance ratings in the euro zone and Europe as a whole remains negative. Of our ratings, approximately 30 percent have negative outlooks or are on CreditWatch with negative implications, 64 percent have stable outlooks, and 6 percent positive outlooks or are on CreditWatch with positive implications.”

The rating agency added that its “more-recent negative update to Europe’s economic growth prospects (see “European Economic Outlook: Back In Recession,” Dec. 1, 2011) and the heightened credit risk reflected in our Jan. 13, 2012 sovereign actions only serve to compound the difficulties that insurers face. In our view, these factors are likely to result in predominantly negative rating actions over the medium term.”

S&P’s rating actions also affected a number of insurers in addition to those discussed above. It summarized the companies affected and the actions taken as follows:
RATINGS LIST
CreditWatch/Outlook Action
To From
Allianz SpA
Counterparty Credit Rating A+/Negative/– AA/Watch Neg/–
Allianz PLC
Counterparty Credit Rating BBB+/Negative/– BBB+/Watch Neg/–
Aviva Insurance (Europe) SE
Counterparty Credit Rating BBB+/Negative/– BBB+/Watch Neg/–
AXA Insurance Ltd.
Counterparty Credit Rating BBB+/Negative/– BBB+/Watch Neg/–
CCR
Caisse Centrale de Reassurance
Counterparty Credit Rating AA+/Negative/– AAA/Watch Neg/–
GENERALI GROUP
Assicurazioni Generali SpA
Alleanza Toro S.p.A
Generali (U.S. branch)
AachenMuenchener Lebensversicherung AG
AachenMuenchener Versicherung AG
Advocard Rechtsschutzversicherung AG
Central Krankenversicherung AG
Cosmos Lebensversicherungs AG
Cosmos Versicherung AG
Envivas Krankenversicherung AG
Generali Deutschland Pensionskasse AG
Generali Lebensversicherung AG
Generali Versicherung AG (Germany)
Generali Versicherung AG (Austria)
Generali IARD
Generali Vie
INA ASSITALIA SpA
Counterparty Credit Rating A+/Watch Neg/– AA-/Watch Neg/–
Generali Holding Vienna AG
Generali Rueckversicherung AG
Counterparty Credit Rating A-/Watch Neg/– A/Watch Neg/–
Deutsche Bausparkasse Badenia AG
Counterparty Credit Rating A/Watch Neg/A-1 A/Watch Neg/A-1
Ceska pojistovna a.s.
Counterparty Credit Rating A/Watch Neg/– A+/Watch Neg/–
Generali USA Life Reassurance Co.
Counterparty Credit Rating A/Stable/– A+/Watch Neg/–
IRISH PUBLIC BODIES
Irish Public Bodies Mutual Insurances Ltd.
Counterparty Credit Rating BBB+/Negative/– BBB+/Watch Neg/–
MAPFRE GROUP
Mapfre S.A.
Counterparty Credit Rating BBB+/Negative/– A/Watch Neg/–
Mapfre Global Risks, Compania Internacional de Seguros y Reaseguros S.A.
Mapfre Re, Compania de Reaseguros, S.A.
Counterparty Credit Rating A/Negative/– AA-/Watch Neg/–
Mapfre U.S.A. Corp.
Counterparty Credit Rating BBB-/Stable/– BBB+/Watch Neg/–
Citation Insurance Co. (MA)
Commerce Insurance Co.
Counterparty Credit Rating A-/Stable/– A+/Watch Neg/–
MILLENNIUMBCP-AGEAS GROUP
Ocidental Companhia Portuguesa de Seguros de Vida S.A.
Ocidental Companhia Portuguesa de Seguros S.A.
Medis Companhia Portuguesa de Seguros de Saude, S.A.
Counterparty Credit Rating BB/Negative/– BBB-/Watch Neg/–
NACIONAL
Nacional de Reaseguros S.A.
Counterparty Credit Rating A/Negative/– A+/Watch Neg/–
SAVA
Pozavarovalnica Sava d.d.
Counterparty Credit Rating A-/Negative/– A-/Watch Neg/–
RSA IRELAND
RSA Insurance Ireland Ltd.
Counterparty Credit Rating BBB+/Negative/– BBB+/Watch Neg/–
CATTOLICA
Societa Cattolica di Assicurazione
Counterparty Credit Rating BBB+/Watch Neg/– A-/Watch Neg/–
TRIGLAV GROUP
Triglav Insurance Co. Ltd.
Triglav Re, Reinsurance Co. Ltd.
Counterparty Credit Rating A/Negative/– A/Watch Neg/–
UNIPOL GROUP
Unipol Assicurazioni SpA
Counterparty Credit Rating BBB+/Watch Neg/– A-/Watch Neg/–
Unipol Gruppo Finanziario SpA
Counterparty Credit Rating BBB-/Watch Neg/– BBB/Watch Neg/–

Source: Standard & Poor’s

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