Groupama boss says S&P cut irrelevant to insurance arm

Groupama Insurances chief executive François-Xavier Boisseau (pictured) said Standard & Poor’s (S&P) decision to cut parent Groupama SA’s financial strength rating (FSR) has no bearing on the insurance arm.

S&P downgraded Groupama SA’s FSR - a measure of an insurer’s ability to pay claims - one notch to BB- from BB yesterday after the company decided not to pay interest on a bond. The ratings are on negative watch, which means they could face a further downgrade.

Groupama Insurances is in the process of being sold to Ageas UK.

Boisseau said: “This latest rating for Groupama Group has no relevance to Groupama Insurances, which on 5 October was placed on credit watch with positive implications by Standard & Poor’s to reflect our impending exit from the group.

“This revised rating is based on our strength and security as an independent business, with the expectation of an investment grade rating in the ‘BBB’ category once the sale to Ageas UK is completed as expected over the coming weeks.

“In the meantime, our business continues to trade strongly and profitably with partner brokers and we also remain very solid financially, with a solvency margin that exceeds twice the regulatory minimums.”