CGU Insurance, Swann Lwrd AA-; CGULMI on CW Neg.Business Editors MELBOURNE, AUSTRALIA--(BUSINESS WIRE)--(Standard & Poor's CreditWire) Sept. 22, 2000 Standard & Poor's today lowered its insurer financial strength and counterparty credit ratings on CGU CGU Conditions Générales d'Utilisation (French) CGU Claremont Graduate University (Claremont, CA) CGU Chang Gung University (Taiwan) CGU Canadian Geophysical Union Insurance Ltd. and Swann Insurance (Aust) Pty. Ltd.--together referred to as CGU Insurance (including the New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. branches)--to double-'A'-minus from double-'A'. The downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. reflects Standard & Poor's opinion that following the merger of CGU Insurance Australia's parent, CGNU CGNU Crazy Go Nuts University (Homestar Runner) CGNU Commercial Union, General Accident and Norwich Union (insurance group, renamed Aviva) PLC (formerly CGU PLC) and Norwich Union Norwich Union is an insurance company in the UK. It is the biggest life-insurer in the UK, and has a strong position in motor insurance. It is part of the Aviva group, itself created by a merger of Norwich Union and CGU plc in 2000. PLC, the nonlife companies are no longer as strategic to the parent group's principle aim of building a strong life and savings business. The change in status reduces the level of implicit support accorded to the ratings as a result of membership of the CGNU group. The rating outlook remains stable. At the same time, the double-'A' insurer financial strength and counterparty credit ratings on CGU Lenders Mortgage Insurance Lenders mortgage insurance (LMI), also known as private mortgage insurance (PMI), is insurance payable to a lender that may be required when taking out a mortgage loan. Ltd. (CGULMI) were placed on CreditWatch Negative. While Standard & Poor's no longer considers this Australian mortgage insurance subsidiary as strategic to the CGNU group, the parent is exploring forms of support that may lead to the retention of CGULMI's double-'A' rating. The precise form of support has not yet been determined, and the CreditWatch action reflects the possibility there may not be a suitable form of support employed. As a result, CGULMI's rating may be lowered by no more than one notch. The ratings on CGU Insurance Ltd. and Swann Insurance (Aust) Pty. Ltd. are based on the Australian group's very strong market franchise, well-diversified book of business, solid and improving operating performance, and good financial structure. The group will maintain its strong capital position, which recovered in 2000 from a weak position at the end of 1999. Premium volumes are expected to grow at a sound rate, and underlying underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. performance should be strong in 2001. While no longer considered to be as strategically important, these companies are not expected to be sold in the near term. The ratings on CGULMI reflect the company's very strong capital structure, strong underwriting performance, solid niche business position in Australia and New Zealand, and supportive ownership by CGU Insurance Australia Ltd., Standard & Poor's said. - CreditWire
RATINGS DOWNGRADED
To From
CGU Insurance Ltd. AA-/Stable/- AA/Stable/-
CGU Insurance Ltd. (New Zealand Branch)*
AA-/Stable AA/Stable
Swann Insurance (Aust) Pty Ltd.
AA-/Stable/- AA/Stable/-
Swann Insurance (Aust) Pty Ltd. (New Zealand Branch)*
AA-/Stable AA/Stable
*Insurer financial strength rating only
RATING PLACED ON CREDITWATCH
CGU Lenders Mortgage Insurance Ltd.
AA/Watch Neg/- AA/Stable/-
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