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FOR IMMEDIATE RELEASE
LONDON - AUGUST 18, 2017 10:24 AM (EDT)
A.M. Best has affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” of Covéa Coopérations and Assurances Mutuelles de France (both domiciled in France). The outlook of these Credit Ratings (ratings) is stable. Concurrently, A.M. Best has withdrawn the ratings of Assurances Mutuelles de France (AM), as the company has requested to no longer participate in A.M. Best’s interactive rating process.
The ratings of Covéa Coopérations reflect its strategic importance to société de groupe d’assurance mutuelle (SGAM) Covéa, a leading mutual insurance group in France, as the group’s intermediate holding company under which Covéa’s operating entities are gathered, and as the group’s primary reinsurance arm. The ratings benefit from Covéa’s excellent business profile as a leader in France’s non-life insurance market, and are supported by the group’s strong consolidated risk-adjusted capitalisation, and solid operating performance, with Covéa reporting a non-life combined ratio of 98.0% for 2016.
Following a restructuring in recent years, the majority of Covéa’s operating insurance companies are now held under Covéa Coopérations, streamlining the group’s structure, increasing the integration of the group’s operations and enhancing the strategic alignment of its members. As the central entity of the group, Covéa Coopérations is owned by Covéa’s mutual members, each being part of one of three historical mutual groups that own a 33.3% stake in the company: AM and La Garantie Mutuelle des Fonctionnaires (the AM-GMF group); MAAF Assurances and MAAF Santé (the MAAF group); MMA IARD Assurances Mutuelles, MMA Vie Assurances Mutuelles and DAS Assurances Mutuelles (the MMA group).
Covéa Coopérations obtained regulatory approval to underwrite reinsurance business in October 2015, and subsequently commenced operations during 2016, writing a start-up portfolio of life and health reinsurance business, and accepting a retrocession quota share covering AM’s international reinsurance portfolio. In line with A.M. Best’s expectations, Covéa Coopérations acquired renewal rights to AM’s portfolio during 2016 and following a portfolio transfer in January 2017, became the Covéa group’s primary reinsurance arm.
The ratings of Covéa Coopérations also consider its good standalone risk-adjusted capitalisation and the expectation that the company will continue to generate solid profits, albeit driven by its investment income. A.M. Best notes that as a reinsurer, Covéa Coopérations’ business profile is expected to remain limited as a following treaty reinsurer on its international portfolio, and considering the start-up nature of its life and health reinsurance activities. In 2016, the company wrote EUR 138.9 million of gross written premium, of which approximately EUR 20 million was life and health, with the balance derived from the quota-share agreement with AM.
The ratings of AM factor in the company’s integration and institutional role within Covéa, as an affiliated mutual member. The benefit of membership to the group includes the financial support that could be provided by Covéa to each of its members in the case of financial difficulty. The ratings also consider AM’s own excellent risk-adjusted capitalisation. The portfolio transfer of the company’s international reinsurance operations to Covéa Coopérations has served to materially weaken its business profile as an operating insurance company. As of January 2017, AM’s insurance operations are limited to writing a small book of direct assistance business, with the company focusing on its institutional role within Covéa, in line with A.M. Best’s expectations.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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