A.M. Best Europe – Rating Services Limited has placed under review with negative implications the financial strength rating of ‘A++’ (Superior) and the issuer credit rating of “aa+” of France’s Caisse Centrale de Reassurance (CCR).
As Best explained in similar cases, “the rating action reflects the continued negative developments regarding the euro zone sovereign debt crisis, with the continued deterioration of the sovereign creditworthiness and the negative economic outlook for the region, which put pressure on the sovereign ratings of the Republic of France.”
Best also pointed out that “CCR currently benefits from an explicit unlimited guarantee provided by the Republic of France to its state-backed business, which is factored in its ratings.”
Best said it would continue to monitor the economic environment and any potential impact on CCR’s ratings. But it also indicated that “upward rating pressures are unlikely at this point.
“Negative rating actions could occur if the level of explicit support given to CCR by the French State or the creditworthiness of the Republic of France were to change.”
Best also observed that “while it appears robust at present, a severe worsening of the company’s risk-adjusted capitalization or a significant deterioration of its operating performance, if they were to occur, could also trigger negative rating actions.”
Source: A.M. Best
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