S&P Downgrades AXA SA

Post by Sharat on April 6, 2010 · Under Business News, Company News, Life Insurance, banking, insurance · Comment

Global credit ratings agency Standard & Poor’s (S&P) says it has lowered its rating on French insurer AXA SA’s core operating entities, and says it will not be likely that the insurance giant will see a recovery in capital adequacy that will support its previous rating within the next couple of years.

S&P lowered AXA SA’s ratings by a single notch from AA to AA-, a rating which is three notches below the highest possible S&P rating of AAA.

S&P says AXA SA’s rating is supported by its very strong competitive position.

The holding company’s rating was lowered to A, midway between AAA and junk territory.

S&P views AXA SA’s credit strength relative to its capitalisation as being weak, despite a recovery over the last few months.

S&P says the ratings outlook for AXA SA is stable and in the ratings agency’s opinion the fundamentals of the group’s business, earnings, and management strategy are likely to counterbalance the negative impact of its capitalisation on its rating.

AXA SA reported a profit during 2009 as it returned to profitability following the worst of the financial crisis, which saw its US businesses hurt its results at the end of last year.

But because of uncertainty in the financial markets, AXA said it wouldn’t adjust financial targets as laid out in its “Ambition 2012” plan.

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