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In the fourth paragraph the names for Vanbreda and First Assist should read: Vanbreda International and First Assist Insurance Services Ltd. (sted Vanbreda and First Assist).
The corrected release reads:
A.M. BEST AFFIRMS RATINGS OF CIGNA LIFE INSURANCE COMPANY OF EUROPE S.A.-N.V. AND CIGNA EUROPE INSURANCE COMPANY S.A.-N.V.
A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of A (Excellent) and the issuer credit ratings of “a” 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). The outlook for both ratings remains stable.
CLICE’s ratings reflect the implicit support it receives from its ultimate parent company, Cigna Corporation (Cigna) (Philadelphia, PA), along with its strong and supportive level of risk-adjusted capitalisation, robust business profile and improving underwriting performance. CEIC’s ratings reflect its strong level of integration with CLICE, together with its solid level of risk-adjusted capitalisation.
CLICE's current and prospective risk-adjusted capitalisation is expected to remain strong and supportive of its current ratings. Increasing capital requirements primarily from new business but also organic growth in 2011 were matched by a capital injection from Cigna, who is expected to remain supportive of CLICE’s business plans in the near future.
Cigna channels its European business through its two European insurance subsidiaries, CLICE and CEIC. Although the majority of gross premiums are written directly by CLICE, regulations in various jurisdictions mean that CEIC—as a non-life carrier—is essential for Cigna’s strategy. CLICE strengthened its business profile with the internalisation of both the Vanbreda International and First Assist Insurance Services Ltd. businesses acquired by Cigna, and its gross written premiums are expected to reach approximately EUR 715 million (USD 960 million) on actual 2012 results, an 80% increase from 2011. A.M. Best expects CLICE’s overall portfolio to increase by around 10% annually in the coming two years despite its life, accident and supplementary businesses being put in run off in 2012. The global health benefits business of CLICE is its most significant and has been strengthened by Cigna’s acquisition of Vanbreda International. In 2012, this business accounted for over 50% of gross written premiums.
CLICE is expected to improve its underwriting performance in 2012 and onward as well as return to a lower combined ratio, compared to a one-off of 101.7% in 2011, following challenging market conditions and some non-recurring losses. Actual 2012 loss and combined ratios are expected to improve for most lines, except for certain segments, where CLICE is expecting to increase profitability margins in the near term. Despite an anticipated deterioration in earnings in 2012, CEIC is expected to continue to contribute positively to the Cigna group going forward, with a forecast pre-tax profit ranging from EUR 1-2 million (USD 1.35–2.7 million) for 2013 and 2014.
Further positive rating developments are unlikely at this time.
A significant deterioration in risk-adjusted capitalisation, future earnings below expectations, deterioration in the ratings of both CLICE and CEIC’s ultimate parent or a reduction in parental support would likely add negative pressure to CLICE and CEIC’s 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. Key criteria utilised include: “Risk Management and the Rating Process for Insurance Companies”; “Rating Members of Insurance Groups”; and “Understanding Universal BCAR”. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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.
A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. Founded in 1899, 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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.