S&P Affirms Rtgs on French Insurer CCR; Otlk Stable.Business Editors PARIS--(BUSINESS WIRE)--May 7, 2003--(Standard & Poor's) Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index Ratings Services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. said today that it had affirmed its 'AAA' counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit and financial strength ratings on France-based reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. Caisse Centrale de Reassurance (CCR 1. CCR - condition code register. 2. CCR - (Database) concurrency control and recovery. ), based on the very strong and consistent support the entity receives from the Republic of France (AAA/Stable/A-1+). The outlook is stable. "The ratings reflect CCR's unrivaled domestic market share in non-insurable and high severity risks, very strong capitalization, and strong operating performance in state-guaranteed reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. ," said Standard & Poor's credit analyst Emmanuelle Cales. Offsetting these strengths are CCR's marginal position and weak earnings in traditional reinsurance businesses. CCR plays a key role in the long-term policy of the French government, providing protection against non-insurable risks, mainly natural disasters. CCR is 100% state-owned and is unlikely to be privatized. In addition to its key role in the government-guaranteed natural catastrophe ("Catastrophes Naturelles", or "Cat Nat") reinsurance program, CCR provides reinsurance for the GAREAT pool (Groupement d'Assurance et de Reassurance Attentat Terrorisme), set up in 2002 to cover potential terrorist acts. CCR has also been authorized to provide aviation liability coverage for a limited period of time. Standard & Poor's expects that CCR's traditional reinsurance business should gradually become profitable -- break-even in 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. results is expected in 2003 -- thanks largely to increases in premium rates to market levels. Traditional reinsurance is also expected to remain an ancillary business to CCR's state-guaranteed reinsurance and should therefore continue to account for less than 50% of premium income. "Should the market lack capacity in any given class of reinsurance, CCR is expected to continue to provide state-guaranteed coverage on a temporary basis," added Ms. Cales. "CCR is also expected to build and maintain an equalization reserve Equalization Reserve A long-term reserve that an insurance company keeps for the purpose of preventing cash-flow depletion in the event of a significant unforeseen catastrophe. above twice the annual "Cat Nat" premium (compared to 110% today), bolstering its already extremely strong capitalization." Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. Alternatively, call one of Standard & Poor's Ratings Desks: London (44) 20-7847-7400; Paris (33) 1-4420-6705; Frankfurt (49) 69-33-999-223; or Stockholm (46) 8-440-5916. Members of the media may contact the Press Office Hotline on (44) 20-7826-3605 or via media_europe@standardandpoors.com. ANALYST E-MAIL ADDRESSES emmanuelle_cales@standardandpoors.com yann_lepallec@standardadnpoors.com InteractiveInsurance_Europe@standardandpoors.com Copyright 2003, Standard & Poor's Ratings Services |
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