A.M. Best Revises Issuer Credit Rating Outlook to Positive for CIGNA Life Insurance Company of Europe S.A.-N.V. and …


A.M. Best has revised the outlook to positive from stable for the issuer credit rating (ICR) of CIGNA Life Insurance Company of Europe S.A.-N.V. (CLICE) and its sister company, CIGNA Europe Insurance Company S.A.-N.V. (CEIC) (both domiciled in Belgium), while affirming the ICR of “a” and the financial strength rating (FSR) of A (Excellent). The outlook for the FSR is stable.

CLICE’s ratings reflect the implicit support it receives from its ultimate parent company, Cigna Corporation (Cigna) (Bloomfield, Connecticut, USA), along with its strong risk-adjusted capitalisation, solid underwriting performance and robust business profile within the global health benefits market. The revised outlook for the ICR mirrors the positive outlook on the ICR of Cigna, and reflects A.M. Best’s opinion that Cigna is well positioned for future profitable growth in various business segments. CEIC’s ratings reflect its strong level of integration and strategic importance to CLICE.

A.M. Best expects that CLICE’s strong risk-adjusted capitalisation will be supported by profitable premiums growth and earnings retention in 2015 and 2016. For its 2014 financial year, CLICE’s financial performance is expected to be robust, and broadly similar to that of 2013 and 2012, when the company reported profit before tax of EUR 43 million and EUR 22 million respectively. The transfer of business from CLICE to CEIC and other affiliated companies had a marginal negative impact on CLICE’s results in 2014.

CEIC is expected to benefit from the transfer of business from CLICE in 2014 and report gross written premiums of approximately EUR 155 million (2013:EUR 79 million) and profit before tax of EUR 5.5 million (2013:loss of EUR 0.8 million).

A change in Cigna’s ratings may lead to positive or negative rating actions for CLICE and CEIC. Additionally, a significant deterioration in CLICE’s or CEIC’s balance sheet strength, a weakening in their operating performance outside of A.M. Best’s expectations, or a change in A.M. Best’s view of their strategic importance to Cigna would add negative pressure to their ratings.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilised:

• Catastrophe Analysis in A.M. Best Ratings

• Rating Members of Insurance Groups

• Risk Management and the Rating Process for Insurance Companies

• Understanding Universal BCAR

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe – Rating Services Limited Supplementary Disclosure.

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Source Article from http://finance.yahoo.com/news/m-best-revises-issuer-credit-180100354.html

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