New York, December 15, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 8 December 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for the rated entities listed below was Life Insurers Methodology published in August 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Life Insurers Methodology
Market Position and Brand: Market position and brand are key factors representing a company's ability to develop and sustain competitive advantages in its chosen markets. Metrics can include but are not limited to relative market share, absolute size, and position within selected markets.
Distribution: A company's access to distribution channels, its ability to control those channels, and its relationships with producers affect its creditworthiness and standing in the market. Metrics can include but are not limited to proportion of captive or controlled distribution, and number of distinct distribution channels.
Product Focus and Diversification: A company's chosen business lines and product offerings have a major influence on its risk profile and creditworthiness because product segments have distinct volatility and competitive attributes. Metrics can include but are not limited to low-risk reserves as a percentage of total reserves, product mix and features, and number of distinct product lines.
Asset Quality: Life insurers mainly invest in high-quality liquid assets, although to improve investment yields and/or match guarantees embedded in their liabilities, many companies allocate a portion of their investments to higher-risk assets. Metrics can include but are not limited to high-risk assets and goodwill & intangibles as percentages of equity, as well as investment concentrations and portfolio liquidity.
Capital Adequacy: An insurer's capital adequacy determines the extent to which it can absorb losses stemming from business and financial risks, including from stress scenarios. Metrics can include but are not limited to adjusted shareholders' equity as a percentage of assets, regulatory capital ratios, insurers' own capital adequacy metrics, and output from Moody's Capital Tool.
Profitability: An insurer's earnings capacity, including earnings quality and sustainability, shows how readily it can meet policy and other financial obligations and generate capital internally. Metrics can include but are not limited to return on capital, return on equity, return on assets, and volatility of such returns.
Liquidity and Asset/Liability Management: A company's asset liability management and its associated liquidity are critical risk factors in the confidence-sensitive life insurance market. Metrics can include but are not limited to liquid assets as a percentage of liquid liabilities, duration and cash flow matching, and economic and market scenario testing.
Financial Flexibility: Insurers benefit from the ability to raise capital externally for growth or acquisitions or to meet unexpected financial demands. Metrics can include but are not limited to adjusted financial leverage, total leverage, earnings coverage, and cash flow coverage, as well as holding company liquidity and access to committed credit facilities.
Other Rating Considerations: In addition to the factors discussed above, other factors such as management, enterprise risk, accounting policies and disclosures, sovereign and regulatory environment, and explicit or implicit support can affect the insurance financial strength ratings of insurance operating companies.
Instrument Notching Considerations: The ratings for debt and preferred stock instruments issued by insurance firms are generally notched down from the insurance financial strength ratings based on the issuing entity, jurisdiction, seniority, collateral, and other features of the instruments.
• AEGON N.V.
• ageas SA/NV
• ALFA INVEST SUGURTA KOMPANIYASI JSC
• Allianz SE
• APICIL Prevoyance
• Assicurazioni Generali S.p.A
• Aviva Plc
• AXA SA
• CNP Assurances
• Covea Cooperations
• Damaan Islamic Insurance Company "Beema"
• Discovery Limited
• Groupe des Assurances du Credit Mutuel
• Guardrisk Life Limited
• Gulf Insurance Group K.S.C.P.
• KFH Takaful Insurance Company K.S.C.
• Kommunal Landspensjonskasse
• Legal & General Group Plc
• Livfoersaekringsbolaget Skandia, oemsesidigt
• M&G Plc
• MACIF
• Momentum Metropolitan Life Limited
• NN Group N.V.
• RLGH Finance Bermuda Ltd.
• Rothesay Limited
• Sampo Plc
• Scottish Widows Limited
• SRLEV NV
• Storebrand ASA
• The Royal London Mutual Insurance Society Ltd
• Unipol Gruppo S.p.A.
• Uzbekinvest a.s.
• Zurich Insurance Company Ltd
The principal methodology used for the rated entities listed below was Property and Casualty Insurers Methodology published in August 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Property and Casualty Insurers Methodology
Market Position, Brand and Distribution: Market position, brand and distribution are key factors representing a company's ability to develop and sustain competitive advantages in its chosen markets. Metrics can include but are not limited to relative market share, underwriting expense ratio, and diversity of distribution channels.
Product Focus and Diversification: A company's chosen business lines have a major influence on its risk profile and creditworthiness because business classes have distinct volatility and competitive attributes. Metrics can include but are not limited to product line and geographic diversification, relative volatility of product lines, and breadth and depth of markets served.
Asset Quality: P&C insurers mainly invest in high-quality liquid assets, given the uncertain timing and magnitude of their liability payments, although companies often allocate a portion of their investments to higher-risk assets. Metrics can include but are not limited to high-risk assets, reinsurance recoverables and goodwill & intangibles as percentages of equity, as well as investment concentrations and portfolio liquidity.
Capital Adequacy: An insurer's capital adequacy determines the extent to which it can absorb losses stemming from business and financial risks, including from stress scenarios. Metrics can include but are not limited to gross underwriting leverage, regulatory capital ratios, insurers' own capital adequacy metrics, and output from Moody's Capital Tool.
Profitability: An insurer's earnings capacity, including earnings quality and sustainability, shows how readily it can meet policy and other financial obligations and generate capital internally. Metrics can include but are not limited to combined underwriting ratio, return on capital, return on equity, return on revenue, and volatility of such returns.
Reserve Adequacy: Our estimate of the redundancy or deficiency of an insurer's loss and loss adjustment expense reserves helps shape our assessment of its reported earnings and capitalization. Metrics can include but are not limited to yearly and weighted average loss development as a percentage of reserves, funding ratio of latent liabilities, and various actuarial estimates.
Financial Flexibility: Insurers benefit from the ability to raise capital externally for growth or acquisitions or to meet unexpected financial demands. Metrics can include but are not limited to adjusted financial leverage, total leverage, earnings coverage, and cash flow coverage, as well as holding company liquidity and access to committed credit facilities.
Other Rating Considerations: In addition to the factors discussed above, other factors such as management, enterprise risk, accounting policies and disclosures, sovereign and regulatory environment, and explicit or implicit support can affect the insurance financial strength ratings of insurance operating companies.
Instrument Notching Considerations: The ratings for debt and preferred stock instruments issued by insurance firms are generally notched down from the insurance financial strength ratings based on the issuing entity, jurisdiction, seniority, collateral, and other features of the instruments.
• ageas SA/NV
• AIG Europe S.A.
• Al Dhafra Insurance Company P.S.C.
• Al Rajhi Company for Cooperative Insurance
• Al-Ain Ahlia Insurance Co.
• ALFA INVEST SUGURTA KOMPANIYASI JSC
• Allianz SE
• American International Group UK Limited
• Assicurazioni Generali S.p.A
• Aviva Plc
• AXA SA
• Botswana Insurance Company Limited
• Bupa Finance Plc
• Chubb Arabia Cooperative Insurance Company
• Covea Cooperations
• Damaan Islamic Insurance Company "Beema"
• Direct Line Insurance Group plc
• Dubai Insurance Company (P.S.C.)
• Euroasia Insurance JV LLC
• Groupe des Assurances du Credit Mutuel
• Guardrisk Insurance Company Limited
• Gulf Insurance Group K.S.C.P.
• KFH Takaful Insurance Company K.S.C.
• Kuwait Insurance Company S.A.K.
• Lansforsakringar AB
• MACIF
• Mediterranean & Gulf Ins. & Reinsurance Co.
• NN Group N.V.
• Oman Insurance Company P.S.C.
• Pohjola Insurance Ltd
• RSA Insurance Group Limited
• Sampo Plc
• Standard Insurance Limited
• Tryg Forsikring A/S
• Unipol Gruppo S.p.A.
• UNITED FIDELITY INSURANCE COMPANY
• Uzbekinvest a.s.
• Walaa Cooperative Insurance Company
• Wethaq Takaful Insurance Company KSCC
• Zurich Insurance Company Ltd
The principal methodology used for the rated entities listed below was Government-Related Issuers Methodology published in February 2020. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Government-Related Issuers Methodology
Assigning a Baseline Credit Assessment (BCA): The majority of Government-Related Issuers (GRIs) begin with an assessment of the GRI's standalone strength (i.e. BCA) – its ability to service and repay outstanding debt without recourse to extraordinary support from the supporting government - using the published sector-specific methodology that is most suitable for the predominant activities of the GRI. Our assessment of standalone strength includes any day-to-day support received from the government that can be clearly distinguished from extraordinary support. Support mechanisms, such as an obligation of the government to ensure the GRI's solvency and liquidity, are reflected in the BCA when they are legally or contractually documented.
Government uplift: The GRI's ratings include any uplift due to systemic support and typically focus on three structural factors and three factors explaining the level of the government's willingness to provide support. Structural factors address the legal and quasi-legal aspects of the government's relationship with the GRI and include: (1) guarantees, (2) ownership level and (3) barriers to support. The factors underlying willingness consider the softer connections between the two entities and include (4) the likelihood of government intervention, (5) political linkages and (6) economic importance. Support is determined using a joint default analysis framework which considers an estimate of the likelihood of extraordinary support, an assessment of the credit quality of the supporting government, and default correlation between the two entities.
GRIs without a BCA: In limited instances, it is not possible or meaningful to assign a BCA. The GRI is so inextricably linked to the government that a meaningful standalone BCA cannot be derived. In such cases, a top-down analytical approach is used that chiefly considers the ability and willingness of the government to provide timely support, instead of the usual bottom-up approach of starting with the BCA and then considering uplift towards the government's rating.
• Al-Ain Ahlia Insurance Co.
• Uzbekinvest a.s.
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
This publication does not announce a credit rating action.
For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com
for the most updated credit rating action information and rating history.
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