LONDON, 13 June 2013—A.M. Best Europe – Rating Services Limited has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and issuer credit rating to “a” from “a-” of Assurances Mutuelles de France (AM) (France). The outlook for both ratings is stable.
The upgrading of the ratings for AM reflect the increased financial flexibility provided by its affiliate membership in the Société de Groupe d’Assurance Mutuelle (SGAM) Covéa , a leading insurance group in France.
This follows Covéa’s internal restructuring that led to the creation of the intermediate holding company Covéa Coopérations, under which the operating entities of the Covéa group are gathered. At year-end 2012, AM owned 14.71% of Covéa Coopérations. A.M. Best’s assessment of AM’s ratings factors in the benefits of its membership in Covéa, which include the possibility of financial support for members of the SGAM. These members include La Garantie Mutuelle des Fonctionnaires, MAAF Assurances, MAAF Santé, MMA IARD Assurances Mutuelles, MMA Vie Assurances Mutuelles and DAS Assurances Mutuelles, in addition to AM.
The ratings of AM also reflect its excellent risk-adjusted capitalisation after taking into account the impact of its significant investments in affiliated companies. Although these investments have decreased in 2012, following the Covéa internal restructuring, they still represent around half of AM’s total assets. In Best’s Capital Adequacy Ratio (BCAR) model, these investments are effectively deducted from capital resources. In its assessment of this treatment of the affiliated investments, A.M. Best believes that AM provides strong capital support for its operations.
Upward pressure on the ratings is unlikely at this point.
Downward pressure on the ratings could be triggered by changes in AM’s membership in the SGAM Covéa or any changes in the SGAM’s structure and governance that would impair AM’s financial flexibility, or any deterioration in the credit fundamentals of the SGAM Covéa.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe – Rating Services Limited Supplementary Disclosure.
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