Groupama has suffered a ratings downgrade at the hands of Standard & Poor's despite the France-based insurer announcing a range of key strategic actions designed to halt the recent slide.
The ratings services firm has lowered its long-term counterparty credit and financial strength ratings on Groupama and its guaranteed subsidiaries to 'BBB-' from 'BBB'.
At the same time, Standard & Poor's lowered its long-term ratings on Groupama GAN Vie to 'BB+' from 'BBB'. In addition, we lowered our issue ratings on Groupama's hybrid capital issues to 'BB' from 'BB+'.
An S&P statement read: "The downgrade reflects our view that Groupama's capital adequacy and regulatory solvency are at weak levels amid highly adverse financial markets, in spite of key strategic actions that the company has announced. These levels are in our view no longer commensurate with our 'BBB' ratings.
"We acknowledge that new management in place at Groupama is implementing comprehensive strategic actions to restore regulatory solvency and capital adequacy to levels that would be consistent with 'BBB' category ratings.
"In addition to those actions that we already referred to in our previous research update on Groupama, management is also considering additional measures that could significantly restore the group's regulatory solvency."
Simplyhealth agreed to buy Groupama's UK Healthcare arm in August. However FSA workload has delayed the sale, with no current time scale in place.
Simplyhealth has both private medical insurance (PMI) and cash plan products, and the sale is expected to catapult it into the top five of health insurers.
