A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating 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) (Bloomfield, Connecticut, USA), along with its strong risk-adjusted capitalisation, improving underwriting performance and robust business profile within the global health benefits market. CEIC's ratings reflect its strong level of integration and strategic importance to CLICE.
CLICE's risk-adjusted capitalisation is supported by moderate premiums growth and partial earnings retention.
CLICE's pre-tax profit is expected to strongly improve to roughly EUR 40 million at year-end 2013. The increase is driven by CLICE's enhanced underwriting performance, as a result of its effective expense control measures and more balanced business mix. The importance of CEIC within Cigna is expected to strengthen as a large portion of business will be transferred from CLICE to CEIC. The transfer is planned to start by end of Q2 2014 and finish by end of 2016, with CEIC's gross written premium and profit before tax expected to reach approximately EUR 150 million and EUR 5.5 million, respectively in 2014.
Positive rating actions for both companies could result from positive movement in Cigna's ratings. A significant deterioration in risk-adjusted capitalisation, future earnings consistently below expectations, deterioration in the ratings of Cigna or a reduction in parental support would likely add negative pressure on both 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. 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
This rating announcement has been issued by A.M. Best Europe Rating Services Limited, which is a subsidiary of A.M. Best Company. 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 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
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