Best Takes Generali, Subs Off Review, Affirms Ratings; Outlook Negative

June 7, 2012

A.M. Best Europe – Rating Services Limited has removed from under review and affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit rating (ICR) of “a” and all debt ratings of Italy’s Assicurazioni Generali S.p.A. and its main subsidiaries.

However, Best has assigned a negative outlook to all of the ratings.

The following is a summary of Best’s report. The full details may be obtained on its web site.

As Best announced in conjunction with these current rating actions, they follow a series of actions taken last December to address the implications for euro zone insurers. Generally it changed the outlook on the ratings, including Generali’s, to negative from stable, while it carried out a more extensive review.

Best said “Generali continues to maintain sizeable exposures to peripheral euro zone debt (Italian exposure mainly related to the market leading position of the group) as well as euro zone financial institutions (including covered bonds). This is offset by Generali’s strong insurance fundamentals, demonstrating robust earnings after tax of €1.15 billion [$1.45 billion] in 2011, supported by a strong franchise in key European markets.”

Best added that an “upward rating movement is unlikely at this point. Negative rating actions could occur if there were a worsening of risk-adjusted capitalization tied to investment losses or a deterioration of the operating environment in key territories.

Source: A.M. Best

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