S&P Rates Commercial Union Assurance AA; Outlk Stable.LONDON--(BUSINESS WIRE)--Standard & Poor's CreditWire 10/26/98 --Standard & Poor's today assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. its double-'A' counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit and financial strength ratings to Commercial Union Assurance Co. PLC and certain operating companies operating company A business that engages in transactions with outsiders. of CU France (see related press release). The ratings are driven by the position of these companies as core entities of the CGU CGU Conditions Générales d'Utilisation (French) CGU Claremont Graduate University (Claremont, CA) CGU Chang Gung University (Taiwan) CGU Canadian Geophysical Union PLC group as determined by Standard & Poor's. The outlook is stable. The CGU group has a well-diversified spread of business internationally, including a strong European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. presence, with most individual operations having critical mass on a stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." basis. The group also has a good balance between life and nonlife insurance -- life represents about 46% of premium income -- including leadership positions in the U.K., France, and the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. . The CGU group has strong capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. supported by generally low-risk and well-diversified operations. The group also has the potential to improve already strong earnings and will benefit from greater financial flexibility. Major rating factors: -- Sound commercial logic for the merger -- the Commercial Union Group (CU) had good European businesses, but lacked the capital to be able to pursue growth aggressively. The new CGU group has a better spread of businesses and has a very good capital base, plus potentially higher profit flows to fund growth both organically and through acquisition. The merger also protects and promotes the company's position in markets such as the U.K. and the U.S. where consolidation was proving a competitive threat. -- Business is very well spread between life and nonlife business, geographically, and by class of business. This provides a large degree of stability as business cycles offset each other. -- Strong individual market positions in the mature markets of the U.K., the U.S., Canada, France, the Netherlands, Australia, and 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. , with expanding operations in growth markets such as Eastern and Southern Europe Southern Europe or sometimes Mediterranean Europe is a region of the European continent. There is no clear definition of the term which can vary depending on whether geographic, cultural, linguistic or historical factors are taken into account. and Asia. CGU has a relatively new operation in Germany, which has a weak market position at present. -- The new management team and structure appears strong, with clear leadership from Bob Scott
n. 1. A part or portion of a structure that extends or projects over another. 2. The suturing of one layer of tissue above or under another layer to provide additional strength, often used in dental surgery. v. -- essentially the U.K. and the U.S. Standard & Poor's believes the company is well placed to manage the integration, although there will undoubtedly be issues of staff morale in the short term. -- Following the merger, the group has improved profitability prospects and even greater stability of results is likely. Both companies exhibited stable profitability as a result of generally well-controlled 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. . The General Accident group (GA) was particularly strong in the U.K. where CU experienced poor results in 1997, essentially because of its motor and marine accounts. Overall profitability will improve as a result of cost savings generated by the merger -- estimated to be UK270 million per year, and through growth of the life businesses. -- Capitalization is strong and is supported by excellent financial flexibility. The new group has adopted CU's more aggressive philosophy in respect of capital allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as in order to achieve strong returns on capital such that capitalization will not return to the superior levels exhibited previously by GA. However, group capitalization is strong and is supported by modest debt leverage, plus the ability to generate large absolute profit flows to support growth, and excellent access to capital markets. Expectations: -- The company is making progress in terms of branding, market positioning, and the group's legal structure. Standard & Poor's expects the merger will be carried out effectively and expense savings from the deal will begin to emerge in 1999; -- Continued growth in the relative importance of life operations and growth in operations outside the U.K. Standard & Poor's believes the company will be well placed to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. any developments in private pension provision and will have the resources to fund these developments, although the pace of change is uncertain; and -- Capitalization will be maintained at a strong level over the medium term, Standard & Poor's said. - CreditWire -0- NEW RATINGS Commercial Union Assurance Co. PLC Counterparty credit rating AA/Stable/-- Financial strength rating AA Abeille Vie Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA Abeille Assurances Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA C.U. Assurances Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA RELATED RATINGS Commercial Union PLC Counterparty credit rating (Local currency) --/--/A-1+ Commercial paper rating A-1+ Commercial Union Assurance Co. of Australia Ltd. (and related entities) Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA General Accident Fire & Life Assurance Corp. PLC Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA General Accident Life Assurance Ltd. Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA General Accident Linked Life Assurance Ltd. Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA General Accident Insurance Co., of America (and related entities) Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA NZI Insurance New Zealand Ltd. Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA General Accident Assurance Co. of Canada (and related entities) Counterparty credit rating (Local currency) AA/Stable/-- Financial strength rating AA |
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