Standard and Poor’s have lowered their rating for Czech insurer CSOB. The previous insurer financial strength (IFS) rating of ‘A-‘ was revised and taken down one notch to ‘BBB+’.
The rating comes the day after Standard and Poor’s lowered their rating for the owner of CSOB, KBC Bank. Standard and Poor’s said that the strong strategic relationship between the banks was the reason that they were both downgraded in such quick succession.
“In our view, CSOP is strategically important to its parent KBC Insurance. Under our group rating methodology, we cap the rating on strategically important entities at one notch below the rating on the parent. Therefore, we lowered [CSOB’s rating] one notch,” the agency said in their press release.
Despite the downgrade, Standard and Poor’s said CSOB, the fourth largest insurer in the Czech Republic, “continues to reflect strong capitalisation, investments and liquidity,” despite a highly competitive Czech insurance/banking market.
Standard and Poor’s finished by saying that CSOB remains an important asset for its parent company, KBC, and that they would be likely to follow suit if the KBC rating changed again.
