Standard & Poor’s Ratings Services has stated that its rating and outlook on French reinsurer AXA Re (currently “AA-“/Stable) “are unaffected by the completion of the sale of AXA Re’s business to newly formed, and as yet unrated, Bermuda-based PARIS RE Holdings Ltd.” AXA completed the transfer last month (See IJ web site Dec.26, 2006).
“However,” S&P said, “the fronting agreement currently in force between AXA Re and PARIS RE will now terminate on Sept. 30, 2007, and not March 31, 2008, as previously advised. Hence, only policyholders that cede business to AXA Re up to and including Sept. 30, 2007, will benefit from the guarantee provided by AXA France IARD (AA-/Positive/–).
“The existing guarantee will cover the full run-off of the existing portfolio at this date. Thereafter, ongoing business will be underwritten by PARIS RE. Should the guarantee provided by AXA France IARD be terminated after that date, the rating on AXA Re would likely be withdrawn. PARIS RE is expected to obtain a rating prior to the termination of the fronting agreement.”
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