TEXT - Fitch takes rating actions on South African insurers

Tue Jan 15, 2013 11:24am EST

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(The following statement was released by the rating agency)
    Jan 15 - Fitch Ratings has taken rating actions on South African (and
related) insurance ratings following its recent downgrade of the 
sovereign ratings. 

The agency has affirmed all national scale ratings relating to the following 
entities and subsidiaries: Sanlam Limited, MMI Limited, Liberty Group Limited, 
AIG South Africa Limited and AIG Life South Africa Limited. The affirmations 
reflect Fitch's belief that the relative creditworthiness of these entities in 
the South African market is unchanged. Fitch has also affirmed the national and 
international ratings of RMB Structured Insurance Limited and RMB Financial 
Services Limited (Ireland) as both the relative and absolute credit risk of 
these entities, in Fitch's view, continues to support their ratings. 

Fitch has downgraded the Insurer Financial Strength (IFS) rating of 
Guernsey-based Home Finance Guarantors (Insurance) Limited (HFGIL) to 'BBB' from
'BBB+' and affirmed South Africa-based Home Loan Guarantee Company's (HLGC) 
National IFS rating at 'AA+(zaf)'. The Outlooks on both ratings are Stable. 
Fitch has simultaneously withdrawn HFGIL's IFS rating as the company has chosen 
to stop participating in the rating process. Therefore, Fitch will no longer 
have sufficient information to maintain the ratings. Accordingly, Fitch will no 
longer provide ratings or analytical coverage for HFGIL.

The downgrade of HFGIL's international IFS rating reflects the deterioration in 
the South African economic environment and the more challenging operating 
conditions the company is facing, in Fitch's opinion. HLGC's national IFS is 
unaffected by the downgrade of the South African sovereign as Fitch believes 
that the relative creditworthiness of HLGC compared to other South African rated
entities is unchanged.

For the rating actions on Old Mutual PLC and related subsidiaries, see 'Fitch 
Downgrades Old Mutual' dated 14 January at www.fitchratings.com. 

RATING SENSITIVITIES

A change in South Africa's Long-term foreign or local currency IDRs would be 
unlikely in itself to lead to changes in the national scale ratings of the 
insurers. However, there could be some rating actions if, for example, some 
insurers were affected differently (positively or negatively) than others by the
factors underlying any future hypothetical change of the sovereign ratings. 

A relative weakening or strengthening of the credit profiles of individual 
entities could lead to changes in both national and international rating levels.
In particular, in the context of a tougher operating environment, these insurers
may struggle to maintain the same level of profitability. 

The rating actions are as follows: 

Home Loan Guarantee Company: 

National IFS rating: affirmed at 'AA+(zaf); Outlook Stable

Home Finance Guarantors (Insurance) Limited: 

IFS rating: downgraded to 'BBB' from 'BBB+'; Outlook Stable, withdrawn

AIG South Africa Limited: 

National IFS rating: affirmed at 'AAA(zaf); Outlook Stable

AIG Life South Africa Limited: 

National IFS rating: affirmed at 'AAA(zaf); Outlook Stable

Sanlam Limited:

National Long-Term Rating: affirmed at 'AA-(zaf)'; Outlook Stable

Sanlam Life Insurance Limited:     

National Long-Term Rating: affirmed at 'AA(zaf); Outlook Stable

National Short-Term Rating: affirmed at 'F1+(zaf); 

National IFS rating: affirmed at 'AA+(zaf); Outlook Stable

Subordinated debt: affirmed at 'A+(zaf)'

Sanlam Developing Markets Limited: 

National Long-Term Rating: affirmed at 'AA(zaf); Outlook Stable

National IFS rating: affirmed at 'AA+(zaf); Outlook Stable

Santam Limited: 

National Long-Term Rating: affirmed at 'AA(zaf); Outlook Stable

National IFS rating: affirmed at 'AA+(zaf); Outlook Stable

Subordinated debt: affirmed at 'A+(zaf)'

MMI Holdings Limited:

National Long-Term Rating: affirmed at 'A+(zaf)'; Outlook Positive

Metropolitan Life Limited: 

National Term Rating: affirmed at 'AA-(zaf); Outlook Positive

National IFS rating: affirmed at 'AA(zaf); Outlook Positive

Subordinated debt: affirmed at 'A(zaf)'

Momentum Group Limited: 

National Long-Term Rating: affirmed at 'AA-(zaf); Outlook Positive

National IFS rating: affirmed at 'AA(zaf); Outlook Positive

Subordinated debt: affirmed at 'A(zaf)'

Liberty Group Limited: 

National Long-Term Rating: affirmed at 'AA-(zaf); Outlook Stable

National IFS rating: affirmed at 'AA(zaf); Outlook Stable

Subordinated debt: affirmed at 'A+(zaf)'

RMB Structured Insurance Limited: 

Insurer Financial Strength: Affirmed at 'BBB'; Outlook Stable

National IFS rating: affirmed at 'A+(zaf); Outlook Stable

RMB Financial Services Limited (Ireland): 

IFS rating: affirmed at 'BBB'; Outlook Stable

 (Caryn Trokie, New York Ratings Unit)
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