S&P Assigns 'AA-' CPA Rating to SPS Reassurance S.A.

Aug 18, 1997, 01:00 ET from Standard & Poor's CreditWire

    LONDON, Aug. 18 /PRNewswire/ -- Standard & Poor's today has assigned its
 double-'A'-minus claims-paying ability rating to SPS Reassurance S.A. (SPS
 RE).  The rating is wholly-based upon explicit support received from the
 immediate parent, AXA Reassurance S.A. (AXA Re, CPA double-'A'-minus), which
 is itself a part of the AXA-UAP group in France.
     Explicit parental support - AXA Re has formally guaranteed its newly
 established subsidiary, SPS RE, in respect of all the company's policyholder
 obligations underwritten while the guarantee remains in force.
     Business Review -- International reinsurance is defined as a core
 strategic activity within the AXA-UAP group, and the AXA Re sub-group remains
 a well-managed, technically competent, and leading force, not only within
 France but also internationally.  Although only incorporated as a reinsurance
 operating company on July 1, 1997, SPS RE nonetheless, has a successful
 20-year track-record as an underwriting agency, when it traded under the name
 of Societe Parisienne de Souscription as a subsidiary of La Reunion Francaise,
 which was acquired by UAP in 1995.  During this time, what is now SPS RE,
 established sound reinsurance relationships with many leading insurance
     CAPITALIZATION -- With French franc (FFr) 348.1 million (US$70 million
 approx.) of fully paid up capital, SPS RE currently enjoys a solvency ratio in
 excess of 100%.  In addition, the capital base and earnings are prudently
 reinsured against substantial windstorm and other catastrophic losses.
     Standard & Poor's expects SPS RE to underwrite some FFr440 million of
 gross premiums in 1997, 25% proportional, 75% excess of loss.  Of this
 business, some 85% is likely to be property-related, 10% marine and 5% other
 miscellaneous, with no facultative and virtually no retroceded business being
     Concerning geographic diversification, premiums are expected to derive
 approximately 42% from North America, 10% France, 18% rest of Europe, 13% Far
 East, 6% Latin America and 11% other worldwide.
     As premiums grow, prospective capitalization is expected to increase so as
 to maintain a satisfactory risk-based position, with the solvency ratio always
 being maintained well-above 50%, Standard & Poor's said. -- CreditWire

SOURCE Standard & Poor's CreditWire