TEXT-S&P rates France-based Helvetia Assurances SA 'A-';otlk stable

Fri Dec 14, 2012 4:25am EST

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(The following statement was released by the rating agency)

Dec 14 -

Overview

-- Helvetia Schweizerische Versicherungsgesellschaft AG is providing an unconditional guarantee to its subsidiary Helvetia Assurances S.A.

-- We are assigning our 'A-' insurer financial strength rating to this subsidiary on the basis of this guarantee.

-- The outlook is stable in line with that on the parent.

Rating Action

On Dec. 14, 2012, Standard & Poor's Ratings Services assigned its 'A-' long-term insurer financial strength rating to Helvetia Assurances S.A. (Helvetia France), a subsidiary of Switzerland-based multiline insurer Helvetia Insurance Group. The outlook is stable.

Rationale

The rating is based on an unconditional guarantee provided by Helvetia Schweizerische Versicherungsgesellschaft AG (A-/Stable/--), one of the main operating and core entities of the Helvetia Group, in respect of the insurance contracts issued by Helvetia France. This explicit support agreement satisfies Standard & Poor's guarantee criteria. As such, the insurer financial strength rating on Helvetia France is equalized with, and will move in tandem with, that on the guarantor.

The ratings on Helvetia Group reflect the group's strong operating performance, strong capitalization, and competitive position. These strengths are partly offset by Helvetia Group's exposure to the current low-interest-rate environment, low earnings contributions from comparably smaller nondomestic operations, and exposure to Italy and Spain through local insurance operations.

Outlook

The outlook is stable. Provided that the parental support agreement remains in force, the rating and outlook on Helvetia France will continue to be aligned with the rating and outlook on the guarantor.

Related Criteria And Research

All articles listed below are available on RatingsDirect on the Global Credit Portal, unless otherwise stated.

-- Interactive Ratings Methodology, April 22, 2009

-- Use of CreditWatch and Outlooks, Sept. 14, 2009

-- Group Methodology, April 22, 2009

-- Timeliness of Payments: Grace Periods, Guarantees, And Use Of 'D' And 'SD' Ratings, Dec. 23, 2010

-- Guarantee Default: Assessing The Impact On The Guarantor's Issuer Credit Rating, May 11, 2012

Ratings List

New Rating; CreditWatch/Outlook Action

Helvetia Assurances S.A.

Financial Strength Rating

Local Currency A-/Stable/--

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