Spanish based company Mapfre is the latest insurer to be affected by a surge of ratings downgrades across the sector, as Fitch moves the company’s Issuer Default Rating (IDR) from ‘A’ to ‘A-‘ and the Insurer Financial Strength (IFS) rating from ‘A+’ to ‘A’.
The action follows last weeks downgrade of Spains long term IRD to ‘A’ from ‘AA’, and comes as no surprise to Fitch.
The agency commented on the “intrinsic link” between the creditworthiness of Spain and the credit rating of Maphre, and said that a further downgrade on the country would likely see the company’s rating follow.
“Mapfre’s ratings would be most likely further downgraded from the current ‘A’ IFS if the Spanish sovereign rating was further downgraded,” a Fitch spokesman said in a statement.
“The ratings could also be downgraded if the exposure to the Spanish insurance market or sovereign debt resulted in underwriting or investment losses beyond Fitch’s current expectations.
“Conversely, Mapfre’s Outlook could be revised to Stable if the Outlook on the Spanish sovereign rating was revised to Stable.”
The news comes after Standard and Poor’s announced the downgrade of some European insurers, and put negative outlooks on a number of others.
The two ratings agency’s have differing views of Italian insurer Generali though, with Standard and Poor’s lowering their rating on the insurer from ‘A+’ to ‘A’ while Fitch affirmed the rating at ‘BBB+’, despite having downgraded Italy last week.
