Aviva’s credit rating cut
Concerns over Aviva Plc’s exposure in the financial markets have led Standard & Poor’s (S&P) to cut the insurer’s long-term counterparty credit rating from “A” to “A+”.
The ratings agency has maintained the “AA-” long-term counterparty credit and insurer financial strength ratings on Aviva’s core insurance operating subsidiaries (including Aviva International Insurance) plus a “negative” outlook.
The move follows an S&P review of European global multiline insurers.
According to the firm’s analyst, Charis Adu-Kwapong, it reflects the view that “current challenging operating and financial market conditions have put pressure on certain key credit fundamentals supporting the nonstandard “one notch” difference between the rating on Aviva and that on its core operating subsidiaries”.
In addition, S&P says it expects difficult investment market conditions to impact adversely on cash flows at Aviva’s subsidiaries during 2009 and 2010.
The report specifically refers to the group’s businesses in the Netherlands, France, Ireland, and the UK in this connection.
Earlier this month, Aviva posted a net loss of £885 million for 2008, compared to a profit of £1.5 billion in 2007.
Europe’s biggest life insurer blamed the deficit on the global financial crisis, which forced it to write down £1.6 billion on investments last year.
Category: Aviva News, Financials, Insurance News, Norwich Union Insurance News
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