Standard and Poor’s have taken negative movements on the ratings of at least four major insurance groups this weekend, painting a bleak picture for the outlook of the insurance industry in 2012.
CNP Assurances and Assicurazioni Generali were both downgraded to ‘A+’ and ‘A’ respectively, while the outlooks for AXA and Allianz were revised to negative. Aviva also had their rating affirmed at ‘AA-‘, but with a negative outlook.
The ratings agency credited most of the downgrades to market adversity, saying the financial market developments at the end of last year put pressure on the capitalisation of the groups.
For CNP, the French insurance group, the company said that the financial markets had damaged the companies ability to restore strong capital adequacy for the next two years. They went on to say that the “challenging economic and financial conditions could further prevent CNP from restoring its capital adequacy, despite strategic action.”
The agency said said, “financial market developments and increased credit risk in the eurozone (in particular the recent downgrade of some eurozone sovereign issuers and the consequent downgrades of financial institutions) were key drivers in the downgrades.”
Regarding the Italian downgrade, the company said “the downgrade reflects Generali’s weakened capital adequacy, which we currently view as only “good” and that we believe will likely remain so over the coming two years. In addition, we believe current market conditions are constraining Generali’s financial flexibility.
Some of the recent ratings from Standard and Poor’s include:
France-Based CNP Assurances Downgraded To ‘A+’
AXA affirmed at AA-. Outlook To Negative.
Allianz affirmed at AA. Outlook to Negative
Assicurazioni Generali, Core Entities Downgraded To ‘A’
Aviva Group’s Core Entities Affirmed At AA-. Outlook Negative