Following the decision today by Standard & Poor’s to downgrade the security rating of Groupama Group, François-Xavier Boisseau, CEO at Groupama Insurances in the UK said:Groupama’s exposure to weak EU sovereign debt forced the UK arm to be placed on sale by the group
“Although as a Groupama subsidiary we are associated with the Group’s security rating, the fact is, we are not rated as an independent business. This is important to understand because based on our current performance, prospects and asset base, it is very clear that the Group’s rating does not offer an accurate reflection of our excellent trading position in the UK nor of the level of security we offer to our broker partners and their clients.
“In 2011 we delivered record profits and despite fierce competition our 2012 revenues remain broadly in line with expectations. Our profitability also remains very impressive. Profit before tax exceeded £16 million at the end of May and our combined ratio improved to 97.9%.”
In addition, Groupama Insurances confirmed that its parent has recently formalised the “ring fencing” of its UK capital position with the FSA, voluntarily restricting its ability to draw on the company’s assets.
Over the first quarter, the solvency margin at Groupama Insurances, (calculated on the current European measure) also improved again to 218% (201% at 31/12/11). This is more than twice the required minimum.
Commenting on the current position of the sale of Groupama’s UK assets Monsieur Boisseau added:
“Whilst at this time I cannot confirm anything specific, good progress is being made with the process and I remain very hopeful that we will be in a position to make an announcement in the coming weeks.
“In the meantime, I am very grateful indeed for the continuing patience and support being offered by our employees and broker partners throughout this period of uncertainty. It is really very much appreciated.”