Rating Update

– On Oct. 14, 2014, Standard & Poor’s Ratings Services assigned its ‘A-‘ long-term counterparty credit and insurer financial strength ratings to Bahrain-based Trust International Insurance & Reinsurance Co. B.S.C.(c) (Trust Re). The outlook is stable.

The ratings on Trust Re reflect our view that the company is core to the Trust Re Group (the group).

The ratings reflect our view of the group’s satisfactory business and strong financial risk profiles, built on an adequate competitive position, very strong capital and earnings, and a moderate risk position. Standard & Poor’s rates Trust Re higher than the Bahraini sovereign because its asset and business exposure to Bahrain is minimal.

The stable outlook reflects our view that Trust Re is likely to maintain its capital adequacy at the ‘AAA’ level. We also anticipate the group maintaining operating performance consistent with our base case.

– On Oct. 14, 2014, Standard & Poor’s Ratings Services revised its outlook on French state-owned reinsurer Caisse Centrale de Reassurance (CCR) to negative from stable. The ‘AA’ long-term counterparty credit and financial strength ratings were affirmed.

The rating action follows the revision of our outlook on France (unsolicited rating AA/Negative/A-1+) on Oct. 10, 2014.

In accordance with our criteria for rating government-related entities (GREs), we believe that there is an almost certain likelihood that CCR would receive timely and sufficient extraordinary support from the French government in the event of financial distress. As a result, we expect the ratings and outlook on CCR to move in line with those on France.

We assess CCR’s stand-alone credit profile at ‘a’, based on our view of the company’s strong business and financial risk profiles. However, under our criteria for rating GREs, we equalize our ratings on CCR with the long-term sovereign rating on France.

The negative outlook reflects that on the sovereign and indicates that we could lower our long-term ratings on CCR if we downgrade France.

Although unlikely at this stage, any indication of a weakening of CCR’s critical role for or integral link with the French government might prompt us to consider a negative rating action on the company.

Source: Aon Benfield Market Analysis