Fitch Ratings has affirmed MutRe S.A.’s Insurer Financial Strength (IFS) rating at ‘A-‘. The Outlook is Stable.
MutRe’s rating continues to reflect its healthy solvency and financial flexibility provided by its committed shareholders base. The rating also takes into account the focused and consistent strategy implemented by its management team, its solid business position in the French accident and health reinsurance market and moderate profitability. The rating remains constrained by the company’s modest size and its exposure to some operational risks and potential pandemic outbreaks not fully covered by the company’s retrocession programme.
The company’s financial profile improved in 2010, partly due to a lower amount of risk assumed. However, the company reported a deteriorated net combined ratio of 104% (97% in 2009) and a Solvency I ratio of 194% (217% in 2009).
Key rating drivers that could lead to an upgrade include increased profitability with the combined ratio sustainably maintained below 100%. Conversely, deterioration in profitability or capital adequacy significantly below the current level could result in a downgrade.
Fitch expects MutRe’s profitability to remain moderate with a net combined ratio around 100% and solvency to stabilise around the current level.
MutRe is a French reinsurance company with shareholder’s funds of EUR119m and gross written premiums of EUR297m in 2010. Major business lines are health (53%), protection (mostly death and disability, 35%) and long-term care reinsurance (10%). MutRe predominantly offers proportional reinsurance treaties to more than 50 French primary insurers, mostly mutual organisations. The company currently employs 24 staff.
Source : Fitch Press Release
