Rating agency Standard & Poor’s has affirmed its BB+ long-term counterparty credit and financial strength rating for Congregational & General Insurance PLC (C&GI).
The move comes as the insurance firm has sold a majority share of its subsidiary MGA, Integra Insurance Solutions Ltd. to the Hannover Re Group. In response, the ratings agency revised the firm’s outlook to positive in reflection of the expectation that C&GI will shortly clarify its long-term strategy and maintain a strong capital adequacy.
Earlier the group had held a rating of ‘stable’ after a review in February of this year had unveiled concerns regarding the company’s unproven strategy to accelerate its growth through its managing general agency. A reliance on third-party capital was also taken into consideration and the execution risk of the insurance firm’s plans were considered to be high.
Now, S&P remarked, the concerns have “turned out to be unfounded” as the advanced sale of the majority stake in Integra demonstrated the management’s ability to “execute its strategy successfully”.
The ratings agency added that it expects the risk profile and capitalisation to further improve over the course of the next year when the company will cease to underwrite household business.
