Moody's affirms Generali's Ratings (Aa3 IFSR), outlook revised to Stable
London, 30 November 2007 -- Moody's Investors Service affirmed the Aa3 insurance financial strength
and A1/A2/A3 debt ratings of Assicurazioni Generali S.p.A.
("Generali") and associated companies (IFSR at Aa3 and see
debt list below) and revised the outlook to stable from negative.
Moody's said that Generali has shown considerable improvements in
several underlying credit fundamentals such as the group's franchise
in its core markets, its level of profitability and efficiency,
and its distribution capabilities. Moody's added that the
previous negative outlook had been driven largely by concerns over Generali's
capital structure and financial leverage, which has marginally improved
in recent months.
"In recent months Generali has strengthened its market position
and franchise in Italy, mainly through the acquisition of Toro,
in France, through successful organic growth of the unit-linked
business, and has significantly increased the group's potential
in new markets, such as Asia and the CEE, for example through
the proposed joint-venture with the PPF group" said Jose
Morago Assistant Vice President, Analyst at Moody's. Moody's
also notes that the group has shown substantial improvements in its overall
distribution capabilities with further efficiency, lower fragmentation
and better control of its main distribution networks in Italy, France
and Germany.
Moody's also said that as a result of the company's initiatives,
Generali's overall cost structure and profitability levels,
particularly in Germany, France as well in the Italian non-life
segment, have materially improved and contributed to stronger and
sustained levels of earnings for the group.
"Despite the aforementioned improvements, and mainly as result
of recent acquisitions and share buy-backs, we continue to
see some pressures on Generali's capital structure and financial
flexibility. The move to stable however reflects the overall credit
improvements" Mr. Morago added.
With regards to the rating drivers going forward, Moody's said that
the following developments could put upward pressure on Generali's ratings:
improved quality and sustainability of underlying earnings associated
with further integration and optimisation of Generali's operational structure,
reduction of financial leverage in the low-20s and fixed-charge
coverage over 10x, and enhanced overall franchise and competitive
position due to successful implementation of the group's long-term
objectives. Conversely, a material deterioration of solvency,
earnings, operating performance and capitalisation levels,
and/or material deterioration of the financial flexibility of the group
(i.e. financial leverage and fixed-charge coverage
remaining respectively over 35% and below 6x), may contribute
to negative ratings pressure.
The date of the previous rating action was 2 August 2007 when Generali's
ratings were affirmed with a negative outlook
Generali Assicurazioni S.p.A., headquartered
in Trieste, Italy, is a major international multi-line
insurer. It reported gross premiums written of EUR 48.4
billion for the first nine months of 2007 and shareholders' equity of
EUR 18.1 billion as of 30 September 2007.
The following insurance financial strength ratings were affirmed with
a stable outlook:
Assicurazioni Generali S.p.A, Aa3
AMB Generali Holding AG -- Aa3, Stable outlook
AachenMuenchener Lebensversicherung AG -- Aa3, Stable
outlook
AachenMuenchener Versicherung AG -- Aa3, Stable outlook
Advocard Rechtschutzversicherung AG -- Aa3, Stable
outlook
AMB Generali Pensionskasse AG -- Aa3, Stable outlook
Central Krankenversicherung AG -- Aa3, Stable outlook
Cosmos Lebensversicherungs-AG -- Aa3, Stable
outlook
Cosmos Versicherung AG -- Aa3, Stable outlook
Dialog Lebensversicherungs-AG -- Aa3, Stable
outlook
Envivas Krankenversicherung AG -- Aa3, Stable outlook
Generali Lebensversicherung AG -- Aa3, Stable outlook
Generali Versicherung AG -- Aa3, Stable outlook
Volksfuersorge Deutsche Lebensversicherung AG -- Aa3,
Stable outlook
Volksfuersorge Deutsche Sachversicherung AG -- Aa3,
Stable outlook
The following debt ratings were affirmed with a stable outlook:
Assicurazioni Generali S.p.A, Senior debt rating,
A1
Assicurazioni Generali S.p.A, Subordinated debt rating,
A2
Assicurazioni Generali S.p.A, Preferred stock debt
rating, A3
London
Simon Harris
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
London
Jose Morago
Asst Vice President - Analyst
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454