Groupama falls to A

Jonathan Rest

FRENCH insurer Groupama has suffered a blow after its financial strength rating was moved to A- from A by Standard & Poor’s (S&P). “The downgrade reflects our view Groupama’s under­writing results are deteriorating and our belief Groupama’s constrained technical earnings will likely delay the restoration of capital adequacy to levels supportive of the ratings,” S&P credit analyst Virginie Crépy said. The outlook is stable, reflecting the rating agency’s belief Groupama’s strong business fundamentals in France are likely to offset pressure on its financial profile at the current rating level, Crépy added. S&P said a positive rating action is unlikely during the next two years in view of Groupama’s present financial profile. A further downgrade could be on the cards if pressure on Groupama’s financial profile intensifies “owing to further deterioration in the group’s capital adequacy or significant additional provisioning needs, or if the group’s under­lying earnings worsen beyond our expectations”.