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S&P Revises Abeille Assurances Outlook to Positive.

Business Editors

June 25, 2002--Standard & Poor's said today that it has revised to positive from stable its outlook on French non-life insurer Abeille assurances, reflecting the likelihood of an upgrade by the end of this year when the company is expected to change its current name and brand to "AVIVA", the new global designation of its U.K.-based parent, the composite insurance group CGNU whose core operating entities are rated AA/Stable/--

At the same time, Standard & Poor's affirmed its single-'A' long-term counterparty credit and insurer financial strength ratings on Abeille assurances. The ratings reflect the company's strong capital base and improved operating performance. Offsetting these strengths is Abeille assurances' relatively small market share, and the impact this has on its business position in the highly competitive French non-life market.

"The outlook revision reflects Abeille assurances' increasing importance to the long-term strategy of CGNU PLC in retail insurance in France," explained Joelle Drut, credit analyst in Standard & Poor's Paris office.

Abeille assurances is CGNU's main tied-agency general insurance operation in France, distributing personal and small commercial lines business, alongside sister life company Abeille Vie (AA/Stable/--). Standard & Poor's now believes Abeille assurances benefits from an enhanced strategic fit within CGNU's French operations, following an in-depth review in 2001, which led to the sale of non-life broker operation CGU Courtage to French mutual insurer Groupama (whose parent, Caisse Centrale des Assurances Mutuelles Agricole is rated A/Stable/--) at the beginning of 2002.

"CGNU will publicly demonstrate the strategic importance of Abeille assurances when introducing the "AVIVA" brand," said Ms. Drut. "The ratings on Abeille assurances could then benefit from an upgrade to double-A-minus.

Ms. Drut pointed out that as a result of the currently disciplined underwriting policy and focus on life sales at Abeille assurances, premium income is likely to grow only marginally in 2002, and will be mainly driven by additional rate increases.

Profitability is expected to improve further, thanks to increased customer loyalty and the continuing reorganization project, which together should lead to a reduced expense ratio. This should enable Abeille assurances to achieve and maintain the group's 102% target combined ratio before the end of 2003. Capitalization is expected to be maintained in the high 'A' range through retained earnings.

A complete list of rating actions is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. The ratings are also available on Standard & Poor's public Web site at www.standardandpoors.com; under Rating Actions, select Newly Released Ratings Listings. Alternatively, call the Standard & Poor's Ratings Desk in Paris at (33) 1-4420-6705.

ANALYTICAL E-MAIL ADDRESSES

joelle_drut@standardandpoors.com

yann_lepallec@standardandpoors.com

Hans_Wright@standardandpoors.com

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Publication:Business Wire
Date:Jun 25, 2002
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