Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's upgrades Aviva Plc's senior debt rating to A2, stable outlook

20 Oct 2017

Aviva's UK subsidiaries' IFSRs upgraded to Aa3, stable outlook

London, 20 October 2017 -- Moody's Investors Service has today upgraded Aviva Plc's senior unsecured debt rating to A2 from A3 and Aviva Plc's commercial paper rating to P-1 from P-2. At the same time, Moody's upgraded the insurance financial strength ratings (IFSR) to Aa3 from A1 of Aviva International Insurance Limited, Aviva Insurance Limited and Aviva Life & Pensions UK Limited. The outlooks of all entities changed to stable from Ratings under Review. The rating action concludes the review initiated on 19 June 2017.

A list of all affected ratings is available at the end of this press release.

RATINGS RATIONALE

The upgrade of Aviva Plc's ratings with a stable outlook reflects the recent improvements in the group's profitability, capital and financial flexibility and Moody's expectations that these improvements are sustainable. In particular, Moody's expects the volatility of Aviva's results to be low, given the substantial de-risking and business re-focusing that the group initiated in 2013. The stable outlook reflects Moody's expectation that low interest rates and Brexit will only have a moderate negative impact on Aviva's credit profile over the next 12 to 18 months. The Aa3 IFSRs of Aviva's UK operations are also underpinned by the group's sustained market-leading positions in the UK life and P&C markets.

Commenting on profitability, Moody's notes that Aviva reported continued growth in operating profits in the last four years. More recently, operating profits increased by 11% to GBP1,465 million in the first half of 2017 and by 12% to GBP3,010 million in 2016, driven by improving results in nearly all regions where the group operates. Results also improved across all segments, as evidenced by the decline in the P&C combined ratio to 94.5% in the first half of 2017 (1H16: 95.7%) and the increase in life new business margin to 3.0% in the first half of 2017 (1H16: 2.7%). When including the strengthening of reserves (GBP385 million after tax) triggered by the change in the regulatory rate, known as the Ogden rate, used to discount motor insurance annuity reserves in the UK, Aviva's net result declined by 22% to GBP859 million in 2016. However, Moody's considers this change a one-off item which is likely to be partly reversed in coming years and which impacted the entire motor insurance sector in the UK.

Moody's expects Aviva to further improve or at least sustain its current level of profitability. In part, this is due to new distribution agreements, such as the one signed with HSBC Bank plc (Aa3 long-term debt rating, negative outlook, a2 adjusted baseline credit assessment) in the UK in August 2017, and by expected continued growth in asset management. Moody's also believes that a successful implementation of Aviva's strategy of developing and strengthening a composite digital offering to customers could gradually enable Aviva to show further growth through cross-selling and to improve profitability through synergy benefits.

Moody's also expects Aviva's profits to be less volatile in 2017 and beyond, compared with earlier years. For example low interest rates have a very limited impact on Aviva's results. According to Moody's, Aviva has one of the lowest exposures to interest rate risk amongst European composite insurers, reflecting its liability profile and asset mix. The low exposure to interest rate risk is evidenced by the low sensitivity of Aviva's Solvency II ratio to a change in interest rates (a decline in interest rates by 25bps would result in a decline of the Solvency II ratio by 6 percentage points). Moody's adds that Aviva's geographic and business diversification (with 62% of the group's premiums related to life insurance and 38% related to P&C insurance in 2016), as well as the group's focus on retail business, contributes to a relatively low business risk profile and should support stable earnings going forward.

Commenting on Aviva's capitalisation, Moody's says that Aviva's solvency ratio improved significantly since year-end 2015. Aviva reported a solvency ratio, based on its internal model and excluding with-profit business (shareholders' view), of 193% as of end June 2017, up from 189% in 2016 and 181% in 2015. The regulatory Solvency II ratio, which does not account for surplus capital in the with-profit business, was 172% in 2016. Aviva's solvency ratio benefitted from model changes in 2016 and from asset disposals but strong capital generation was also a key driver of this improvement. In fact earnings generated by the group represented GBP1.7 billion in 2016 (when including holding costs and interest expenses), equivalent to 13 percentage points of the solvency ratio, and GBP1.1 billion in the first half of 2017.

Moody's mentions that Aviva seeks to operate with a Solvency II ratio (shareholders' view) between 150% and 180%. As a result, Moody's expects the group to redeploy capital, either through additional share buy-backs (Aviva already completed a GBP300 million share buy-back programme in 2017), debt repayments, bolt-on acquisitions or business growth. Nonetheless, given the group's capital generation, Moody's expects Aviva to maintain a strong level of capital in the next two to three years. In addition, thanks to a low sensitivity to financial risks, Moody's expects Aviva's capital to show low levels of volatility.

Moody's adds that improving profitability and capitalisation will benefit Aviva's financial flexibility. The rating agency expects Aviva's financial leverage to decrease to around 26% at year-end 2017 from 28.3% following the repayment of debt in 2017 (GBP500 million) while capital continues to improve. Moody's also says that given Aviva's good cash position and strong capital, the group has the flexibility to repay more debt in the next two years. Improving profitability and a reduction in interest costs will also support improvements in the group's earnings coverage.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Moody's says that positive rating pressure could arise from (1) improvements in profitability as evidenced by a return on capital consistently above 8% across the underwriting cycle, (2) a sustained decrease in financial leverage to below 20%, and (3) further sustainable improvements in capitalisation.

Conversely, negative rating pressure could arise from (1) deterioration in profitability as evidenced by a return on capital below 6% across the underwriting cycle or (2) a sustained rise in adjusted financial leverage beyond 30%, or (3) a decline in capitalisation resulting for example in a solvency II ratio (shareholders' view) consistently below 170%.

LIST OF AFFECTED RATINGS

Issuer: Aviva Plc

..Upgrades:

....Senior Unsecured Regular Bond/Debenture, upgraded to A2 from A3

....Senior Unsecured Medium-Term Note Program, upgraded to (P)A2 from (P)A3

....Subordinate Regular Bond/Debenture, upgraded to A3(hyb) from Baa1(hyb)

....Subordinate Medium-Term Note Program, upgraded to (P)A3 from (P)Baa1

....Junior Subordinated Regular Bond/Debenture, upgraded to A3(hyb) from Baa1(hyb)

....Senior Subordinate Regular Bond/Debenture, upgraded to A3(hyb) from Baa1(hyb)

....Senior Subordinate Medium-Term Note Program, upgraded to (P)A3 from (P)Baa1

....Preferred Stock, upgraded to Baa1(hyb) from Baa2(hyb)

....Commercial Paper, upgraded to P-1 from P-2

..Affirmations:

....Backed Commercial Paper, affirmed P-1

..Outlook Action:

....Outlook changed to Stable from Ratings under Review

Issuer: Aviva International Insurance Limited

..Upgrade:

....Insurance Financial Strength Rating, upgraded to Aa3 from A1

Outlook Action:

....Outlook changed to Stable from Ratings under Review

Issuer: Aviva Insurance Limited

..Upgrade:

....Insurance Financial Strength Rating, upgraded to Aa3 from A1

..Outlook Action:

....Outlook changed to Stable from Ratings under Review

Issuer: Aviva Life & Pensions UK Limited

..Upgrade:

....Insurance Financial Strength Rating, upgraded to Aa3 from A1

..Outlook Action:

....Outlook changed to Stable from Ratings under Review

Issuer: Friends Life Limited

..Upgrade:

....Insurance Financial Strength Rating, upgraded to Aa3 from A1

..Outlook Action:

....Outlook changed to Stable from Ratings under Review

Issuer: Friends Life Holdings plc

..Upgrades:

....Backed Junior Subordinated Regular Bond/Debenture, upgraded to A3(hyb) from Baa1(hyb)

....Backed Senior Subordinated Regular Bond/Debenture, upgraded to A2(hyb) from A3(hyb)

..Outlook Action:

....Outlook changed to Stable from Ratings under Review

PRINCIPAL METHODOLOGIES

The principal methodologies used in rating Aviva Plc were Global Life Insurers published in April 2016, and Global Property and Casualty Insurers published in May 2017. The principal methodology used in rating Aviva International Insurance Limited and Aviva Insurance Limited was Global Property and Casualty Insurers published in May 2017. The principal methodology used in rating Aviva Life & Pensions UK Limited, Friends Life Limited and Friends Life Holdings plc was Global Life Insurers published in April 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Benjamin Serra
VP - Senior Credit Officer
Financial Institutions Group
Moody's France SAS
96 Boulevard Haussmann
Paris 75008
France
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Marc R. Pinto, CFA
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.