December 15, 2011 by Canadian Underwriter
Based on the eurozone sovereign debt crisis, A.M. Best Europe Rating Services Limited has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) for the non-operating holding company Aviva plc and its subsidiary companies, but has placed the ratings under review with negative implications.
“These rating actions were driven by Aviva’s exposure to investments in several peripheral eurozone economies, Italy in particular,” A.M. Best reported in a statement. “A.M. Best’s rating actions on Aviva and other European (re)insurers reflect their exposure to the continued deterioration of the sovereign creditworthiness of several eurozone countries and the negative economic outlook for the region.”
A.M. Best said the rationale for taking rating action at this point “is largely attributable to the current level of credit and liquidity risk for insurers operating within the eurozone countries – most notably Italy and Spain.
“The perceived strain on the economies of these countries and companies operating within their borders is growing rapidly with very little evidence of a solution being formulated to address near-term concerns.”
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