TEXT-Fitch affirms Prevoir Vie, Prevoir Risques Divers IFS at 'A'

Fri Nov 16, 2012 11:30am EST

Nov 16 - Fitch Ratings has affirmed France-based companies Prevoir Vie and
Prevoir Risques Divers' Insurer Financial Strength (IFS) ratings at 'A'. The
agency has also affirmed Societe Centrale Prevoir's (the group's holding
company) Long-term Issuer Default Rating (IDR) at 'A-'. The Outlook on all
ratings is Stable.

Prevoir's ratings reflect its solid capital adequacy, resilient earnings
capacity and the steady strategy pursued by its conservative management.
Offsetting factors include its limited business size, the current and
prospective lack of geographical diversification and relatively high exposure to
equities and real estate investments. In particular, its limited size and lack
of geographical diversification leaves the group exposed to potential
industry-wide changes in the French insurance sector.

Fitch expects 2012 technical and financial results to be in line with previous
years'. At end-2011, Prevoir Vie, the group's largest insurance company, had a
regulatory solvency ratio of 1.3x the minimum requirement, excluding unrealised
gains (3.9x including unrealised gains). Based on this and on the agency's own
risk-adjusted assessment, Fitch considers Prevoir group's capital adequacy to be
commensurate with its current rating levels and expects it to remain so.

Societe Centrale Prevoir's IDR is one notch higher than it would be under
Fitch's standard notching methodology, reflecting both the lack of any financial
debt and the fact that the company directly holds significant financial assets
(including cash) in addition to its ownership of the two insurance operating
companies.

The company's relatively low overall risk profile reflects its focus on
individual risks and its limited exposure to longevity risk. Fitch views
positively that the majority of the group's premiums are recurrent, which helps
to generate stable cash flows.

Prevoir maintains a conservative financial profile in order to continue
self-financing growth with its own capital, although the proportion of
investments invested in "risky" assets (namely, equities and real estate) is
relatively high.

Prevoir Vie (90% of gross written premiums (GWP)) distributes life and
protection insurance products. Prevoir Risques Divers (10% of GWP) distributes
protection and health insurance products. Societe Centrale Prevoir is a
privately-owned holding company; 70% of the capital is held by the descendants
of the founding family and 30% by current and former employees.

Prevoir's core business is to insure individuals and families against death,
disability and sickness. It has traditionally focused its franchise on
individuals from the middle-income bracket and distributes its products almost
exclusively in France through a dedicated network of 850 sales employees. Since
1996, Prevoir group has expanded its insurance operations abroad, although
premiums from international activities remain small (2%).

An upgrade of the ratings is unlikely in the near term, given the limited scale
and geographical diversification of the group. However, over the longer term,
growth in terms of GWP and new business volume along with profitable financial
performance and solid capital adequacy could lead to an upgrade.

The key rating triggers that could result in a downgrade include a prolonged
period of poor financial performance leading to a depleted capital position.
Fitch would also view negatively any significant unexpected change in the
group's conservative risk appetite and management.

Additional information is available at www.fitchratings.com.

The ratings above were solicited by, or on behalf of, the issuer, and therefore,
Fitch has been compensated for the provision of the ratings.

Applicable criteria, 'Insurance Rating Methodology', dated 18 October 2012, is
available at www.fitchratings.com.

Applicable Criteria and Related Research:
Insurance Rating Methodology - Amended
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