Fitch Ratings has revised the outlooks for the long-term issuer default (IDR) and insurer financial strength (IFS) ratings of CAMCA Assurance (CAA) and CAMCA Reassurance (CAR) to stable from negative and affirmed the ratings at ‘A+’.
CAA and CAR (jointly CAMCA), both domiciled in Luxembourg, are ultimately owned by Credit Agricole’s 39 regional banks (caisses regionales).
CA is a cooperative banking group encompassing its 39 caisses regionales, Credit Agricole S.A. (CA S.A.), the group’s listed central body, and Credit Agricole Corporate and Investment Bank (CACIB).
The ratings agency has the same IDRs for CA, CA S.A. and CACIB. Fitch does not rate the regional banks, but CA’s IDRs would also apply to them if they were rated.
The ratings reflect Fitch’s view that CAA and CAR (jointly CAMCA) are core captive companies of CA, as CAMCA’s goals are tied to CA’s risk management.
“We believe that CA’s regional banks will provide support to their core captive insurance subsidiaries, if needed,” Fitch said.
“This is highlighted by previous capital injections by the regional banks into CAA. CAMCA’s ratings are therefore aligned with CA’s long-term IDR.”
Both companies rely on their parent for their role in insuring the group’s guaranteed housing loans, their business position, and their strategic direction.
Fitch said that profit-reallocation mechanisms and reinsurance programmes further strengthen their integration with CA.
CAA and CAR were well capitalised at the end of 2022, with CAA reporting a Solvency II ratio of 250% (end-2021: 265%), while CAR had a Solvency II ratio of 315% (306%).
CAA’s premium volume increased by 7.7% to €417m in 2022, supported by strong home loan production from CA’s network during the year. However, Fitch expects CAA’s premium volume to decline in 2023.
CAA and CAR reported strong operating profits on continued low cost of risk. CAA’s Fitch-calculated net combined ratio improved to 65.2% in 2022 (2021: 66.2%) and reported a net income of €21m in 2022 (2021: €20.2m).
CAR’s net income before allocation to the equalisation reserve was €40m in 2022 (2021: €70m).