S&P Raises Eureko Group Core Subsidiaries Outlook to Stable; Affirms Ratings

December 22, 2004

Standard & Poor’s Ratings Services announced that it has revised its outlook on all entities of the Netherlands-based Eureko insurance group to stable from negative.

At the same time, S&P said it has affirmed its “A+” long-term counterparty credit and insurer financial strength ratings on the core operating entities of the group, its “BBB+” long-term counterparty credit and senior unsecured debt ratings on Eureko’s holding companies–Eureko B.V. and Achmea Holding N.V.–and its “A-2” short-term counterparty credit and commercial paper ratings on Achmea Holding N.V.

“The outlook revision mainly reflects the group’s strongly improved capitalization and a turnaround in operating performance for all business units,” noted S&P credit analyst David Laxton.

“The ratings on the various entities of Eureko reflect the group’s strong management team, strong capitalization, and strong competitive position in the Dutch health and non-life insurance markets,” said the announcement.

It also noted, however, that “despite a strong improvement in the underlying performance of the life business,” this segment “remains weaker compared with the group’s overall performance, and is an offsetting factor for the ratings.”

S&P said that the raising the out look to stable reflects its expectations that: “(1) the group will demonstrate a continuing positive trend in its life operations, (2) Eureko will report continued growth in earnings (excluding one-off items) in 2005 and thereafter, translating into an improving ROE, (3) the group will maintain its leading position in the Dutch health and non-life markets while continuing to deliver strong operating results, and (4) Eureko will maintain a strong level of capitalization with the capital adequacy ratio within the ‘AA’ range, underpinned by a strong quality of capital and strong financial flexibility.”

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