TEXT - S&P may change MMA IARD Assurances Mutuelles
(The following statement was released by the rating agency) Overview -- France-based composite mutual insurance group Covea has announced that it will restructure its operations, in particular creating an intermediate holding company, Covea Cooperations, which will own all operating entities of Covea. -- The mutual group MMA will own a third of Covea Cooperations, alongside the mutual groups MAAF and GMF, which could affect our views of the financial and business profiles of MMA IARD Assurances Mutuelles (MMA). -- We are therefore placing our 'A-' insurer financial strength and counterparty credit ratings on MMA on CreditWatch with developing implications. -- The developing implications reflect the possibility that we could raise, lower, or affirm the ratings on MMA, after we further assess the risks and benefits for MMA from the restructuring. Rating Action On Nov. 21, 2012, Standard & Poor's Ratings Services placed its 'A-' insurer financial strength and counterparty credit ratings on French mutual insurer MMA IARD Assurances Mutuelles (MMA) on CreditWatch with developing implications. We also placed our 'A-' financial strength rating on MMA's U.K. subsidiary Covea Insurance plc on CreditWatch with developing implications. Rationale The CreditWatch placement follows France-based composite mutual insurance group Covea's announcement that it will undertake a groupwide legal and financial restructuring, with potential implications for MMA IARD Assurances Mutuelles (MMA), which is a member of Covea. We therefore expect to assess the impact the restructuring could have on the ratings on MMA. In particular, Covea will create Covea Cooperations, a sub-holding company to be owned by Covea's three mutual groups MMA, MAAF and GMF. Covea Cooperations will likely be the full owner of the group's insurance operating entities. The mutual group MMA will own a third of Covea Cooperations meaning it will indirectly own (through Covea Cooperations) one third of the operating entities of the GMF and MAAF groups. This is likely to materially affect MMA's' business and financial profiles, in our opinion, because MMA's scope of consolidation, on which we base our opinion of MMA's financial strength, will change substantially. We nevertheless understand that this restructuring is subject to regulatory and policyholder assembly approvals. The rating on MMA is supported by its strong competitive position in the French property/casualty market, prudent investment strategy, and solid capitalization. Partially offsetting these strengths are MMA's financial management practices that are not commensurate with the current size of the insurer's life portfolio and only good, albeit improving, operating performance. CreditWatch We aim to resolve or update the CreditWatch within the next 90 days. During this period, we will assess the implications of the restructuring on MMA's business and financial profiles, and in turn, on the ratings. We understand the restructuring will be completed by year-end 2012. We could raise, affirm, or lower the ratings on MMA, depending on our views of the potential implications on its financial and business risk profiles. An upgrade or a downgrade, if any, is unlikely to exceed two notches. Related Criteria And Research -- Use Of CreditWatch And Outlooks, Sept. 14, 2009 -- Group Methodology, April 22, 2009 -- Interactive Ratings Methodology, April 22, 2009 Ratings List Ratings Affirmed; CreditWatch/Outlook Action To From MMA IARD Assurances Mutuelle Counterparty Credit Rating Local Currency A-/Watch Dev/-- A-/Stable/-- MMA IARD Assurances Mutuelle Covea Insurance Plc Financial Strength Rating Local Currency A-/Watch Dev/-- A-/Stable/-- (Caryn Trokie, New York Ratings Unit)
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